香港交易及結算所有限公司及香港聯合交易所有限公司對本公佈的內容概不負責，對其準確性或完 整性亦不發表任何聲明，並明確表示概不就因本公佈全部或任何部分內容而產生或因依賴該等內容 而引致的任何損失承擔任何責任。 CHANGYOU INTERNATIONAL GROUP LIMITED 暢由國際集團有限公司 （於開曼群島註冊成立的有限公司） （股份代號：1039） 截至二零二五年六月三十日止六個月之中期業績公佈 財務摘要 1 ‧ 本集團收入減少約11.8%至截至二零二五年六月三十日止六個月的約人民幣90.4百萬元（二零 二四年六月三十日：約人民幣102.4百萬元）。 ‧ 截至二零二五年六月三十日止六個月的暢由聯盟業務商品總額約為人民幣122.7百萬元（二零 二四年六月三十日：約人民幣141.5百萬元），減少約13.3%。 ‧ 截至二零二五年六月三十日止六個月，本集團毛利約為人民幣19.6百萬元（二零二四年六月 三十日：約人民幣18.4百萬元）。 ‧ 截至二零二五年六月三十日止六個月，本集團錄得虧損約人民幣3.8百萬元（二零二四年六月 三十日：約人民幣8.1百萬元）。 ‧ 截至二零二五年六月三十日止六個月的每股基本及 ...

[Financial Summary](index=1&type=section&id=%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) [Key Financial Data](index=1&type=section&id=%E4%B8%BB%E8%A6%81%E8%B2%A1%E5%8B%99%E6%95%B8%E6%93%9A) For the six months ended June 30, 2025, the company's revenue decreased by 1.4% to RMB 417.5 million, while profit before tax and profit for the period increased by 4.9% and 5.1% respectively, with total assets slightly down and shareholders' equity significantly up by 21.6% For the six months ended June 30, 2025, Financial Summary | Indicator | June 30, 2025 (RMB million) | Same Period in 2024 (RMB million) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 417.5 | 423.6 | -1.4% | | Profit before tax | 192.1 | 183.2 | 4.9% | | Profit for the period | 144.3 | 137.3 | 5.1% | | Total assets (period-end) | 12,851.4 | 13,055.8 (year-end last year) | -1.6% | | Shareholders' equity (period-end) | 3,138.2 | 2,581.4 (year-end last year) | 21.6% | | Average return on equity | 10.1% | - | - | | Average return on assets | 2.2% | - | - | - For the six months ended June 30, 2025, revenue was approximately **RMB 417.5 million**, a decrease of approximately **1.4%** compared to approximately RMB 423.6 million in the same period last year[3](index=3&type=chunk) - For the six months ended June 30, 2025, profit before tax was approximately **RMB 192.1 million**, an increase of approximately **4.9%** compared to approximately RMB 183.2 million in the same period last year[3](index=3&type=chunk) - For the six months ended June 30, 2025, profit for the period was approximately **RMB 144.3 million**, an increase of approximately **5.1%** compared to approximately RMB 137.3 million in the same period last year[3](index=3&type=chunk) - As of June 30, 2025, shareholders' equity was approximately **RMB 3,138.2 million**, an increase of approximately **21.6%** compared to approximately RMB 2,581.4 million at the end of last year[3](index=3&type=chunk) [Management Discussion and Analysis](index=2&type=section&id=%E7%AE%A1%E7%90%86%E5%B1%A4%E8%A8%8E%E8%AB%96%E8%88%87%E5%88%86%E6%9E%90) [1. Operating Review](index=4&type=section&id=1.%20%E7%B6%93%E7%87%9F%E5%9B%9E%E9%A1%87) In the first half of 2025, despite global economic challenges, AI emerged as a growth engine, and the company achieved a 5.1% net profit growth, increased equity, and optimized asset quality through strategic transformation and enhanced risk control [1.1 Economic Landscape](index=4&type=section&id=1.1%20%E7%B6%93%E6%BF%9F%E5%BD%A2%E5%8B%A2) The first half of 2025 saw global economic slowdowns and geopolitical shifts, yet AI became a new growth driver, while China's GDP grew by 5.3% and "Two New" policies spurred leasing industry transformation - In the first half of 2025, global economic growth is projected to slow to **2.4%** (from 2.9% in 2024), with global inflation at **3.6%**, higher than initial forecasts[16](index=16&type=chunk) - AI is expected to drive global GDP growth by **0.5% annually** between 2025 and 2030[16](index=16&type=chunk) - China's GDP reached **RMB 66,053.6 billion** in the first half, with a **5.3% year-on-year growth**, and outstanding social financing increased by **8.9% year-on-year**[17](index=17&type=chunk) - In the first half of 2025, the average interest rate for new corporate loans was approximately **3.3%**, about **45 basis points lower** than the same period last year[17](index=17&type=chunk) - The "Two New" policies (large-scale equipment renewal and trade-in of consumer goods) drove a **18.2% year-on-year increase** in equipment purchase investment, transforming the leasing industry into a strategic partner for industrial upgrading[18](index=18&type=chunk) [1.2 Company's Response](index=5&type=section&id=1.2%20%E5%85%AC%E5%8F%B8%E6%87%89%E5%B0%8D) The company achieved a 5.1% net profit growth, increased total equity to RMB 3.14 billion, and significantly grew operating lease income by 325.6%, while optimizing asset quality and reducing financing costs through strategic initiatives - The company's net profit increased by **5.1% year-on-year**, total equity rose to **RMB 3.14 billion**, and operating lease income grew by **325.6% year-on-year**[19](index=19&type=chunk) - Non-performing asset ratio decreased to **1.1%**, and provision coverage ratio increased to **241.2%**, indicating steady optimization of asset quality[19](index=19&type=chunk) - In the first half, **6 new industry-finance integration projects** were added, driving **RMB 470 million** in leasing placements, accounting for **13.5%** of overall business[20](index=20&type=chunk) - For the first time, big data modeling was used to develop specialized rating models for intelligent manufacturing and operational clients, increasing the proportion of high-quality clients[21](index=21&type=chunk) - Successfully completed the first transfer of non-performing asset trust beneficiary rights, with over **RMB 20 million** recovered through collection and disposal[22](index=22&type=chunk) - In the first half, **RMB 4.081 billion** in debt financing was achieved, with interest expenses decreasing by **11.6%** year-on-year, reaching a new low in financing costs[23](index=23&type=chunk) [1.3 Business Innovation](index=7&type=section&id=1.3%20%E6%A5%AD%E5%8B%99%E5%89%B5%E6%96%B0) The company signed strategic cooperation agreements with Hangjing Innovation and Yimu Technology, establishing asset operation platforms and committing RMB 500 million and RMB 300 million respectively over three years to support industry upgrades in drones and intelligent mining machinery - Signed a strategic cooperation agreement with Beijing Hangjing Innovation Technology Co., Ltd., jointly establishing an asset operation platform, with a planned **RMB 500 million** in funding support over the next three years to promote drone industry upgrading[24](index=24&type=chunk) - Signed a strategic cooperation agreement with Xiamen Yimu Zhihui Technology Co., Ltd., jointly establishing an asset operation platform, with a planned **RMB 300 million** in funding support over the next three years to drive the new energy and intelligent upgrading of the mining sector[25](index=25&type=chunk) [2. Profit and Loss Analysis](index=8&type=section&id=2.%20%E6%90%8D%E7%9B%8A%E5%88%86%E6%9E%90) During the reporting period, the Group's total revenue decreased by 1.4% to RMB 417.5 million, but net profit increased by 5.1% to RMB 144.3 million, driven by a significant rise in operating lease income and a reduction in interest expenses [2.1 Overview](index=8&type=section&id=2.1%20%E6%A6%82%E8%A7%88) During the reporting period, the Group's total revenue was RMB 417.5 million, a 1.4% year-on-year decrease, while net profit for the period was RMB 144.3 million, a 5.1% year-on-year increase, reflecting continuous asset structure optimization and improved profitability - Total revenue was **RMB 417.5 million**, a **1.4% decrease** compared to RMB 423.6 million in the same period last year[26](index=26&type=chunk) - Net profit for the period was **RMB 144.3 million**, a **5.1% increase** compared to RMB 137.3 million in the same period last year[26](index=26&type=chunk) [2.2 Revenue](index=8&type=section&id=2.2%20%E6%94%B6%E7%9B%8A) The Group's total revenue decreased by 1.4% to RMB 417.5 million, with interest income accounting for 81.9% (down 6.5%), consulting fee income growing by 11.2% (14.4% share), and operating lease income significantly increasing by 325.6% (3.7% share) Revenue by Service Category and Changes | Revenue Category | 2025 (RMB thousand) | Proportion (%) | 2024 (RMB thousand) | Proportion (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Interest income | 342,005 | 81.9 | 365,865 | 86.4 | -6.5 | | Consulting fee income | 60,199 | 14.4 | 54,112 | 12.8 | 11.2 | | Operating lease income | 15,268 | 3.7 | 3,587 | 0.8 | 325.6 | | Total revenue | 417,472 | 100.0 | 423,564 | 100.0 | -1.4 | [2.2.1 Interest Income](index=9&type=section&id=2.2.1%20%E5%88%A9%E6%81%AF%E6%94%B6%E5%85%A5) Interest income decreased by 6.5% year-on-year to RMB 342.0 million, representing 81.9% of total revenue, primarily due to intensified industry competition and a decline in average market interest rates, despite a 3.0% increase in average interest-bearing asset balance - Interest income decreased by **6.5%** to **RMB 342.0 million**, accounting for **81.9%** of total revenue[30](index=30&type=chunk) - Average balance of interest-bearing assets increased by **3.0%** to **RMB 11,446.9 million**[31](index=31&type=chunk) - Average yield on interest-bearing assets decreased from **6.6% to 6.0%**, mainly due to intensified industry competition and declining market interest rates[33](index=33&type=chunk) [2.2.2 Consulting Fee Income](index=10&type=section&id=2.2.2%20%E8%AB%AE%E8%A9%A2%E8%B2%BB%E6%94%B6%E5%85%A5) Consulting fee income increased by 11.2% year-on-year to RMB 60.2 million, representing 14.4% of total revenue, with both policy consulting fees and management and business consulting fees growing by approximately 11% - Consulting fee income increased by **11.2%** to **RMB 60.2 million**, accounting for **14.4%** of total revenue[34](index=34&type=chunk) Consulting Service Fee Income by Service Category | Service Category | 2025 (RMB thousand) | Proportion (%) | 2024 (RMB thousand) | Proportion (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Policy consulting fee income | 42,284 | 70.2 | 37,991 | 70.2 | 11.3 | | Management and business consulting fee income | 17,915 | 29.8 | 16,121 | 29.8 | 11.1 | | Total consulting fee income | 60,199 | 100.0 | 54,112 | 100.0 | 11.2 | [2.2.3 Operating Lease Income](index=11&type=section&id=2.2.3%20%E7%B6%93%E7%87%9F%E7%A7%9F%E8%B3%83%E6%94%B6%E5%85%A5) Operating lease income significantly increased by 325.6% year-on-year to RMB 15.3 million, representing 3.7% of total revenue, driven by the expansion of operating lease business - Operating lease income increased by **325.6%** to **RMB 15.3 million**, accounting for **3.7%** of total revenue[37](index=37&type=chunk) [2.3 Interest Expense](index=11&type=section&id=2.3%20%E5%88%A9%E6%81%AF%E9%96%8B%E6%94%AF) Interest expense decreased by 11.6% year-on-year to RMB 129.4 million, primarily due to effective capital management and optimized debt structure, with commercial bank borrowing interest expense significantly down 46.1% while bond issuance interest expense rose 54.5% - Interest expense decreased by **11.6%** to **RMB 129.4 million**, mainly due to capital position and financing cost management[38](index=38&type=chunk) Interest Expense by Funding Source | Funding Source | 2025 (RMB thousand) | Proportion (%) | 2024 (RMB thousand) | Proportion (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Commercial banks | 42,681 | 33.0 | 79,134 | 54.0 | -46.1 | | Bonds issued | 61,878 | 47.8 | 40,062 | 27.4 | 54.5 | | Interest-free security deposits from lessees | 24,673 | 19.1 | 26,757 | 18.3 | -7.8 | | Lease liabilities | 174 | 0.1 | 414 | 0.3 | -58.0 | | Total interest expense | 129,406 | 100.0 | 146,367 | 100.0 | -11.6 | - Borrowing interest expense cost rate decreased by **0.7 percentage points** from 3.5% to **2.8%**[43](index=43&type=chunk) [2.4 Net Interest Spread and Net Interest Margin](index=13&type=section&id=2.4%20%E6%B7%A8%E5%88%A9%E5%B7%AE%E5%92%8C%E6%B7%A8%E6%81%AF%E5%B7%AE) During the reporting period, net interest spread was 3.0%, a 0.1 percentage point year-on-year decrease, and net interest margin was 3.7%, a 0.3 percentage point year-on-year decrease, mainly due to intensified industry competition and declining average market interest rates affecting interest-bearing asset yields Net Interest Margin and Related Data | Indicator | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Interest income | 342,005 | 365,865 | -6.5 | | Interest expense | (129,406) | (146,367) | -11.6 | | Net interest income | 212,599 | 219,498 | -3.1 | | Interest income yield | 6.0% | 6.7% | -10.4 | | Interest expense cost rate | 3.0% | 3.6% | -16.7 | | Net interest spread | 3.0% | 3.1% | -3.2 | | Net interest margin | 3.7% | 4.0% | -7.5 | - Net interest spread was **3.0%**, a **0.1 percentage point decrease** from the same period last year; net interest margin was **3.7%**, a **0.3 percentage point decrease** from the same period last year[46](index=46&type=chunk) [2.5 Other Net Income](index=14&type=section&id=2.5%20%E5%85%B6%E4%BB%96%E6%B7%A8%E6%94%B6%E7%9B%8A) Other net income significantly increased by 71.0% year-on-year to RMB 4.0 million, primarily driven by a substantial 1,009.5% growth in government grants - Other net income was **RMB 4.0 million**, a **71.0% increase** from the same period last year, mainly due to an increase in government grants[48](index=48&type=chunk) Other Net Income Details | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Bank deposit interest income | 1,901 | 2,045 | -7.0 | | Government grants | 1,642 | 148 | 1,009.5 | | Other | 410 | 119 | 244.5 | | Total other net income | 3,953 | 2,312 | 71.0 | [2.6 Operating Expenses](index=14&type=section&id=2.6%20%E7%B6%93%E7%87%9F%E9%96%8B%E6%94%AF) Operating expenses slightly increased by 1.8% year-on-year to RMB 69.8 million, with staff costs decreasing by 17.6%, depreciation and amortization significantly growing by 107.5%, and service expenses declining by 21.2% - Operating expenses were **RMB 69.8 million**, a **1.8% increase** compared to the same period last year[52](index=52&type=chunk) Operating Expenses Details | Item | 2025 (RMB thousand) | Proportion (%) | 2024 (RMB thousand) | Proportion (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Staff costs | 30,824 | 44.2 | 37,387 | 54.5 | -17.6 | | Depreciation and amortization | 19,648 | 28.1 | 9,467 | 13.8 | 107.5 | | Service expenses | 12,232 | 17.5 | 15,519 | 22.7 | -21.2 | | Office and travel expenses | 2,209 | 3.2 | 2,278 | 3.3 | -3.0 | | Public maintenance fees | 866 | 1.2 | 981 | 1.4 | -11.7 | | Other | 4,025 | 5.8 | 2,908 | 4.3 | 38.4 | | Total operating expenses | 69,804 | 100.0 | 68,540 | 100.0 | 1.8 | [2.7 Impairment recognized under Expected Credit Loss model, net](index=15&type=section&id=2.7%20%E9%A0%90%E6%9C%9F%E4%BF%A1%E7%94%A8%E6%90%8D%E5%A4%B1%E6%A8%A1%E5%9E%8B%E4%B8%8B%E7%A2%BA%E8%AA%8D%E7%9A%84%E6%B7%A8%E9%A1%8D) Net impairment losses recognized under the expected credit loss model increased by 9.8% year-on-year to RMB 33.8 million, primarily due to continuous enhancement of the risk control system and improved credit discovery capabilities, expanding client base while maintaining asset quality - Impairment losses under expected credit loss model were **RMB 33.8 million**, a **9.8% increase** compared to the same period last year[56](index=56&type=chunk) Impairment recognized under Expected Credit Loss model, net details | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Loans and receivables | 33,790 | 30,774 | 9.8 | | Total impairment recognized under Expected Credit Loss model, net | 33,790 | 30,774 | 9.8 | [2.8 Income Tax Expense](index=15&type=section&id=2.8%20%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense increased by 4.1% year-on-year to RMB 47.8 million, mainly due to higher profit before tax, with an effective tax rate of 24.9% for the reporting period - Income tax expense was **RMB 47.8 million**, a **4.1% increase** compared to the same period last year, mainly due to increased profit before tax[59](index=59&type=chunk) - The effective income tax rate for the reporting period was **24.9%**[60](index=60&type=chunk) [2.9 Profit for the Period](index=15&type=section&id=2.9%20%E6%9C%9F%E5%85%A7%E5%88%A9%E6%BD%A4) Profit for the period increased by 5.1% year-on-year to RMB 144.3 million, primarily driven by a 11.6% reduction in interest expense, despite a 1.4% decrease in total revenue and a 1.8% increase in operating expenses, with future profitability expected to grow - Profit for the period was **RMB 144.3 million**, a **5.1% increase** compared to the same period last year[61](index=61&type=chunk) - Profit growth was mainly due to a **11.6% decrease** in interest expense, offsetting the **1.4% decrease** in total revenue and **1.8% increase** in operating expenses[61](index=61&type=chunk) - Future profitability is expected to continuously strengthen with enhanced capital strength, leasing business development, and improved digitalization capabilities[62](index=62&type=chunk) [2.10 Basic Earnings Per Share](index=16&type=section&id=2.10%20%E5%9F%BA%E6%9C%AC%E6%AF%8F%E8%82%A1%E6%94%B6%E7%9B%8A) Basic earnings per share increased by RMB 0.01 year-on-year to RMB 0.11, primarily due to the Group's enhanced profitability - Basic earnings per share was **RMB 0.11**, an increase of **RMB 0.01** compared to the same period last year[63](index=63&type=chunk) [3. Financial Position Analysis](index=17&type=section&id=3.%20%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E5%88%86%E6%9E%90) As of the end of the reporting period, the Group's total assets were RMB 12,851.4 million, a 1.6% decrease from the end of last year, with loans and receivables accounting for 83.0% and cash and cash equivalents for 9.4%; total liabilities decreased by 7.3%, and shareholders' equity significantly grew by 21.6% to RMB 3,138.2 million, mainly due to domestic share issuance [3.1 Assets (Overview)](index=17&type=section&id=3.1%20%E8%B3%87%E7%94%A2%EF%BC%88%E6%A6%82%E8%A7%88%EF%BC%89) As of the end of the reporting period, the Group's total assets were RMB 12,851.4 million, a 1.6% decrease from the end of last year, with loans and receivables accounting for 83.0%, cash and cash equivalents for 9.4%, and property and equipment significantly increasing by 279.6% - Total assets were **RMB 12,851.4 million**, a **1.6% decrease** from the end of last year[64](index=64&type=chunk) - Loans and receivables accounted for **83.0%** of total assets, and cash and cash equivalents for **9.4%**[64](index=64&type=chunk) Assets Analysis | Asset Category | June 30, 2025 (RMB thousand) | Proportion (%) | December 31, 2024 (RMB thousand) | Proportion (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Loans and receivables | 10,667,900 | 83.0 | 11,505,094 | 88.2 | -7.3 | | Cash and cash equivalents | 1,205,511 | 9.4 | 840,966 | 6.4 | 43.3 | | Property and equipment | 307,244 | 2.4 | 80,945 | 0.6 | 279.6 | | Total assets | 12,851,409 | 100.0 | 13,055,814 | 100.0 | -1.6 | [3.2 Loans and Receivables](index=18&type=section&id=3.2%20%E8%B2%B8%E6%AC%BE%E5%8F%8A%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) At the end of the reporting period, net loans and receivables were RMB 10,946.8 million, an 8.4% decrease from the end of last year, mainly due to the company's proactive industry focus; the non-performing asset ratio significantly decreased by 38.9% to 1.1%, and the provision coverage ratio increased by 33.7 percentage points to 241.2%, indicating overall stable asset quality - Net loans and receivables were **RMB 10,946.8 million**, an **8.4% decrease** from the end of last year[67](index=67&type=chunk) - The non-performing asset ratio decreased from **1.8% to 1.1%**, a **38.9% decrease**[80](index=80&type=chunk) - The provision coverage ratio increased by **33.7 percentage points** to **241.2%**[83](index=83&type=chunk) [3.2.1 Maturity Profile of Loans and Receivables](index=18&type=section&id=3.2.1%20%E8%B2%B8%E6%AC%BE%E5%8F%8A%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E7%9A%84%E5%88%B0%E6%9C%9F%E6%83%85%E6%B3%81) As of the end of the reporting period, net loans and receivables maturing within one year accounted for 60.9% of the total, indicating a balanced business placement pace and stable future cash inflows Maturity Profile of Net Loans and Receivables | Maturity Date | June 30, 2025 (RMB thousand) | Proportion (%) | December 31, 2024 (RMB thousand) | Proportion (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Within 1 year | 6,658,151 | 60.9 | 7,286,730 | 61.0 | -8.6 | | 1-2 years | 2,935,774 | 26.8 | 3,273,312 | 27.4 | -10.3 | | 2-3 years | 1,052,193 | 9.6 | 1,018,393 | 8.5 | 3.3 | | 3 years and above | 300,645 | 2.7 | 368,525 | 3.1 | -18.4 | | Net loans and receivables | 10,946,763 | 100.0 | 11,946,960 | 100.0 | -8.4 | - Net loans and receivables maturing within one year accounted for **60.9%** of the total[72](index=72&type=chunk) [3.2.2 Asset Quality of Loans and Receivables](index=19&type=section&id=3.2.2%20%E8%B2%B8%E6%AC%BE%E5%8F%8A%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E7%9A%84%E8%B3%87%E7%94%A2%E8%B3%AA%E9%87%8F%E6%83%85%E6%B3%81) The Group maintained prudent risk management, improving asset management efficiency through industry focus, business model transformation, and enhanced risk control strategies, resulting in a significant 45.7% decrease in the non-performing asset ratio to 1.1% and a substantial reduction in sub-standard and loss assets - The non-performing asset ratio decreased from **1.8% to 1.1%**, a **38.9% decrease**[80](index=80&type=chunk) - Sub-standard assets decreased by **60.4%**, loss assets decreased by **98.0%**, and doubtful assets increased by **73.7%**[80](index=80&type=chunk) - Actively implemented the "leasing + investment + service" business model and improved the industry-finance integration business model[76](index=76&type=chunk) - Successfully conducted the first transfer of non-performing asset trust beneficiary rights, enhancing non-performing asset disposal capabilities[78](index=78&type=chunk) Net Loans and Receivables Classification Details | Classification | June 30, 2025 (RMB thousand) | Proportion (%) | December 31, 2024 (RMB thousand) | Proportion (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Normal | 9,942,780 | 90.9 | 10,854,839 | 90.8 | -8.4 | | Special mention | 888,380 | 8.1 | 879,156 | 7.4 | 1.0 | | Sub-standard | 15,799 | 0.1 | 39,898 | 0.3 | -60.4 | | Doubtful | 97,418 | 0.9 | 56,084 | 0.5 | 73.7 | | Loss | 2,386 | 0.0 | 116,983 | 1.0 | -98.0 | | Non-performing assets | 115,603 | - | 212,965 | - | -45.7 | | Non-performing asset ratio | 1.1% | - | 1.8% | - | -38.9 | [3.2.3 Impairment and Provision for Loans and Receivables](index=21&type=section&id=3.2.3%20%E8%B2%B8%E6%AC%BE%E5%8F%8A%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85%E6%B8%9B%E5%80%BC%E5%8F%8A%E6%92%A5%E5%82%99%E6%83%85%E6%B3%81) Provisions for interest-bearing assets decreased by RMB 163.0 million to RMB 278.9 million, while the provision coverage ratio for loans and receivables increased by 33.7 percentage points to 241.2%, with Stage 1 assets increasing and Stage 2 decreasing - Provisions for interest-bearing assets decreased from **RMB 441.9 million** to **RMB 278.9 million**[81](index=81&type=chunk) - The provision coverage ratio for loans and receivables was **241.2%**, an increase of **33.7 percentage points** from the end of last year[83](index=83&type=chunk) - Stage 1 assets accounted for **90.5%** (up 0.6 percentage points), Stage 2 for **0.5%** (down 0.6 percentage points), and Stage 3 remained flat at **9.0%**[83](index=83&type=chunk) Overall Provision for Loans and Receivables | Item | June 30, 2025 (RMB thousand) | Proportion (%) | December 31, 2024 (RMB thousand) | Proportion (%) | | :--- | :--- | :--- | :--- | :--- | | Provision for non-performing assets | 97,378 | 34.9 | 199,040 | 45.0 | | Provision for normal and special mention assets | 181,485 | 65.1 | 242,826 | 55.0 | | Total provisions | 278,863 | 100.0 | 441,866 | 100.0 | | Non-performing assets | 115,603 | - | 212,965 | - | | Provision coverage ratio | 241.2% | - | 207.5% | - | [3.3 Other Assets](index=23&type=section&id=3.3%20%E5%85%B6%E4%BB%96%E8%B3%87%E7%94%A2) As of the end of the reporting period, cash and cash equivalents were RMB 1,205.5 million, restricted deposits RMB 70.1 million, accounts receivable RMB 8.2 million, trade and other assets RMB 131.8 million, deferred income tax assets RMB 117.9 million, property and equipment RMB 307.2 million, and investments in associates RMB 305.2 million, with other financial and intangible assets being relatively small - Cash and cash equivalents were **RMB 1,205.5 million**, and restricted deposits were **RMB 70.1 million**[88](index=88&type=chunk) - Accounts receivable balance was **RMB 8.2 million**, and trade and other assets balance was **RMB 131.8 million**[88](index=88&type=chunk) - Property and equipment balance was **RMB 307.2 million**, mainly operating lease assets[88](index=88&type=chunk) - Investments in associates balance was **RMB 305.2 million**[89](index=89&type=chunk) [3.4 Liabilities](index=24&type=section&id=3.4%20%E8%B2%A0%E5%82%B5) As of the end of the reporting period, total liabilities were RMB 9,713.2 million, a 7.3% decrease from the end of last year, with borrowings being the main component, accounting for 76.6% and slightly increasing - Total liabilities were **RMB 9,713.2 million**, a **7.3% decrease** from the end of last year[91](index=91&type=chunk) - Borrowings accounted for **76.6%** of total liabilities, a slight increase from 76.5% at the end of last year[91](index=91&type=chunk) Liabilities Analysis | Liability Category | June 30, 2025 (RMB thousand) | Proportion (%) | December 31, 2024 (RMB thousand) | Proportion (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Borrowings | 7,436,027 | 76.6 | 8,008,224 | 76.5 | -7.1 | | Trade and other liabilities | 2,264,923 | 23.3 | 2,443,414 | 23.3 | -7.3 | | Income tax payable | 12,293 | 0.1 | 22,801 | 0.2 | -46.1 | | Total liabilities | 9,713,243 | 100.0 | 10,474,439 | 100.0 | -7.3 | [3.5 Borrowings](index=24&type=section&id=3.5%20%E5%80%9F%E6%AC%BE) As of the end of the reporting period, total borrowings were RMB 7,436.0 million, a 7.1% decrease from the end of last year, with bank loans decreasing to 31.4%, asset-backed securities increasing to 56.4%, and credit bonds slightly decreasing; the company successfully issued three tranches of asset securitization products and one tranche of ultra-short-term financing bonds, achieving new lows in financing costs and actively diversifying financing channels - Total borrowings were **RMB 7,436.0 million**, a **7.1% decrease** from the end of last year[94](index=94&type=chunk) - Bank loans accounted for **31.4%** of total borrowings (decrease), asset-backed securities for **56.4%** (increase), and credit bonds for **12.2%** (slight decrease)[96](index=96&type=chunk) - Issued three tranches of asset securitization products raising **RMB 1.6 billion**, and one tranche of ultra-short-term financing bonds raising **RMB 400 million**, with financing costs reaching new lows[96](index=96&type=chunk) Borrowings by Funding Source | Funding Source | June 30, 2025 (RMB thousand) | Proportion (%) | December 31, 2024 (RMB thousand) | Proportion (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Bank loans | 2,334,814 | 31.4 | 3,344,993 | 41.7 | -30.2 | | Asset-backed securities | 4,192,205 | 56.4 | 3,656,920 | 45.7 | 14.6 | | Credit bonds | 909,008 | 12.2 | 1,006,311 | 12.6 | -9.7 | | Total borrowings | 7,436,027 | 100.0 | 8,008,224 | 100.0 | -7.1 | [3.6 Trade and Other Liabilities](index=26&type=section&id=3.6%20%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B2%A0%E5%82%B5) Total trade and other liabilities were RMB 2,264.9 million, a 7.3% decrease from the end of last year, primarily comprising security deposits from lessees, accounts payable, and bills payable - Total trade and other liabilities were **RMB 2,264.9 million**, a **7.3% decrease** from the end of last year[99](index=99&type=chunk) [3.7 Capital and Reserves](index=26&type=section&id=3.7%20%E8%B3%87%E6%9C%AC%E5%8F%8A%E5%84%B2%E5%82%99) Total shareholders' equity was RMB 3,138.2 million, a 21.6% increase from the end of last year, mainly due to an increase in share capital and reserves - Total equity was **RMB 3,138.2 million**, a **21.6% increase** from the end of last year[100](index=100&type=chunk) Total Equity | Item | June 30, 2025 (RMB thousand) | Proportion (%) | December 31, 2024 (RMB thousand) | Proportion (%) | Change (%) | | :--- | :--- | :--- | :--- | :--- | :--- | | Share capital | 1,615,102 | 51.5 | 1,333,334 | 51.7 | 21.1 | | Reserves | 1,523,064 | 48.5 | 1,248,041 | 48.3 | 22.0 | | Total equity | 3,138,166 | 100.0 | 2,581,375 | 100.0 | 21.6 | [4. Capital Expenditure](index=26&type=section&id=4.%20%E8%B3%87%E6%9C%AC%E9%96%8B%E6%94%AF) During the reporting period, the Group's capital expenditure amounted to RMB 221.4 million, primarily allocated to upgrading information systems for business operations and risk management, acquiring operating lease machinery and equipment, and purchasing office and electronic equipment - Capital expenditure was **RMB 221.4 million**, mainly for information system upgrades, operating lease machinery and equipment, and office equipment purchases[103](index=103&type=chunk) [5. Risk Management](index=26&type=section&id=5.%20%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86) The Group has established a prudent, efficient, and innovative risk management system to balance risks and returns in technology and new economy sectors, addressing credit, interest rate, liquidity, and foreign exchange risks with corresponding policies - The Group has established a prudent, efficient, and innovative risk management system to balance risks and returns and maximize Group value[104](index=104&type=chunk) - Key operating risks include credit risk, interest rate risk, liquidity risk, and foreign exchange risk[105](index=105&type=chunk) [5.1 Credit Risk](index=27&type=section&id=5.1%20%E4%BF%A1%E7%94%A8%E9%A2%A8%E9%9A%AA) Credit risk is a primary concern, managed through strict client admission policies, a scientific credit evaluation system, comprehensive due diligence, rigorous project approval, and a complete post-lease management system - Implemented focus on "business segments," "core clients," and "core leased assets," along with "three-person project approval" and "pre-approval" procedures[107](index=107&type=chunk) - Continuously optimized the "entity credit + asset credit" two-dimensional rating system, introducing external big data to enhance model adaptability and accuracy[108](index=108&type=chunk) - Established a comprehensive due diligence system, considering risks from the lessee entity, related enterprises, and leased assets[109](index=109&type=chunk) - Implemented a "reviewer" mechanism, tiered approval, specialized approval, and regular analysis and review of overdue projects to improve approval efficiency[110](index=110&type=chunk) - Established a complete post-lease management system, covering leased asset management, lessee operation monitoring, leased asset classification, and non-performing asset disposal[111](index=111&type=chunk) [5.2 Interest Rate Risk](index=29&type=section&id=5.2%20%E5%88%A9%E7%8E%87%E9%A2%A8%E9%9A%AA) Interest rate risk primarily relates to the Group's interest-bearing bank and other financing, as well as finance lease receivables, with plans to monitor rate changes and use financial instruments like interest rate swaps to hedge exposures - Interest rate risk primarily relates to interest-bearing bank and other financing, as well as finance lease receivables[112](index=112&type=chunk) - Hedging interest rate risk exposure through asset-liability management, repricing management, and interest rate swaps[112](index=112&type=chunk) [5.3 Liquidity Risk](index=29&type=section&id=5.3%20%E6%B5%81%E5%8B%95%E6%80%A7%E9%A2%A8%E9%9A%AA) Liquidity risk, the inability to obtain sufficient funds at a reasonable cost to meet payment obligations, is managed by maintaining adequate cash and cash equivalents and implementing comprehensive monitoring policies and procedures, with the Group's liquidity remaining good during the reporting period - The Group holds cash and cash equivalents deemed sufficient by management and implements comprehensive policies and procedures to monitor them[113](index=113&type=chunk) - The Group's liquidity position was good during the reporting period[113](index=113&type=chunk) [5.4 Foreign Exchange Risk](index=29&type=section&id=5.4%20%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) Foreign exchange risk arises from transactions denominated in currencies other than RMB, the Group's functional currency, and is managed through financial instruments like currency swaps to hedge exposure - Foreign exchange risk primarily arises from transactions denominated in currencies other than RMB[114](index=114&type=chunk) - The Group uses financial instruments such as currency swaps to hedge foreign exchange risk exposure[114](index=114&type=chunk) [6. Pledged Assets of the Group](index=30&type=section&id=6.%20%E9%9B%86%E5%9C%98%E8%B3%87%E7%94%A2%E8%B3%AA%E6%8A%BC) As of the end of the reporting period, RMB 4,938.7 million of loans and receivables were pledged, and RMB 70.1 million in cash was used for bank acceptance bills, bank factoring loans, and asset securitization businesses - **RMB 4,938.7 million** of loans and receivables were pledged[115](index=115&type=chunk) - **RMB 70.1 million** in cash was used for bank acceptance bills, bank factoring loans, and asset securitization businesses[115](index=115&type=chunk) [7. Material Investments, Acquisitions and Disposals](index=30&type=section&id=7.%20%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E3%80%81%E6%94%B6%E8%B3%BC%E5%8F%8A%E5%87%BA%E5%94%AE) During the reporting period, the Group had no material investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures - During the reporting period, the Group had no material investments, acquisitions, or disposals of subsidiaries, associates, or joint ventures[116](index=116&type=chunk) [8. Human Resources](index=30&type=section&id=8.%20%E4%BA%BA%E5%8A%9B%E8%B3%87%E6%BA%90) As of June 30, 2025, the Group had 146 employees, with approximately 100% holding bachelor's degrees or above and 69.2% holding master's degrees or above; staff retention is high, with over 55.5% having more than 5 years of service, supported by flexible compensation, clear career paths, and comprehensive training and benefits [8.1 Staff Costs](index=30&type=section&id=8.1%20%E5%83%B1%E5%93%A1%E6%88%90%E6%9C%AC) During the reporting period, the Group's staff costs were approximately RMB 30.8 million, a decrease from RMB 37.4 million in the same period last year, including salaries, social insurance, share-based payments, and training - Staff costs were approximately **RMB 30.8 million**, a decrease from approximately RMB 37.4 million in the same period last year[117](index=117&type=chunk) [8.2 Staff Structure](index=30&type=section&id=8.2%20%E5%83%B1%E5%93%A1%E7%B5%90%E6%A7%8B) As of June 30, 2025, the Group had 146 employees, with approximately 100% holding bachelor's degrees or above and 69.2% holding master's degrees or above; overall staff stability is high, with over 55.5% having more than 5 years of service - As of June 30, 2025, the Group had **146 employees**, with approximately **100%** holding bachelor's degrees or above, and approximately **69.2%** holding master's degrees or above[118](index=118&type=chunk) - Over **55.5%** of current employees have more than **5 years of service**, indicating overall staff stability and high retention[118](index=118&type=chunk) [8.3 Incentive Schemes](index=30&type=section&id=8.3%20%E6%BF%80%E5%8B%B5%E8%A8%88%E5%8A%83) The Group has established flexible and efficient employee compensation incentive schemes linking remuneration to performance and contributions, providing clear career development paths, and implementing annual performance evaluations and targeted training based on operational goals - Established flexible and efficient employee compensation incentive schemes, linking remuneration to work performance and contributions[119](index=119&type=chunk) - Provides clear career development paths and implements comprehensive performance evaluations and targeted training programs[119](index=119&type=chunk) [8.4 Employee Benefits](index=31&type=section&id=8.4%20%E5%83%B1%E5%93%A1%E7%A6%8F%E5%88%A9) The Group strictly fulfills all statutory social insurance and housing provident fund obligations as required by Chinese laws and regulations, and provides supplementary medical and accidental injury insurance to eligible employees - Strictly fulfills statutory social insurance and housing provident fund obligations[120](index=120&type=chunk) - Provides supplementary medical and accidental injury insurance to eligible employees[120](index=120&type=chunk) [8.5 Staff Training](index=31&type=section&id=8.5%20%E5%83%B1%E5%93%A1%E5%9F%B9%E8%A8%93) The Group prioritizes staff training, having established a competency-based training system, organized various management and professional skills courses, and implemented development programs for cadres and young talents - Established a competency-based training system, organizing multiple management and professional skills training courses[121](index=121&type=chunk) - Implemented development programs for cadres and young talents[121](index=121&type=chunk) [9. Contingent Liabilities and Capital Commitments](index=31&type=section&id=9.%20%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5%E5%8F%8A%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94) As of the end of the reporting period, the Group had no material contingent liabilities; capital and credit commitments primarily include finance lease commitments for signed but uncommenced leases, unpaid capital contributions to associates, and amounts payable for operating lease assets signed but not yet recognized [9.1 Contingent Liabilities](index=31&type=section&id=9.1%20%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5) As of the end of the reporting period, the Group had no material contingent liabilities - As of the end of the reporting period, the Group had no material contingent liabilities[122](index=122&type=chunk) [9.2 Capital Commitments and Credit Commitments](index=31&type=section&id=9.2%20%E8%B3%87%E6%9C%AC%E6%89%BF%E8%AB%BE%E5%8F%8A%E4%BF%A1%E8%B2%B8%E6%89%BF%E6%93%94) As of the end of the reporting period, off-balance sheet credit commitments amounted to RMB 106.1 million, capital expenditure commitments to RMB 2.34 million, and property and equipment commitments to RMB 2.593 million Capital Commitments and Credit Commitments | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Off-balance sheet credit commitments | 106,122 | 109,269 | | Capital expenditure commitments | 2,340 | 2,340 | | Property and equipment | 2,593 | 995 | - Off-balance sheet credit commitments primarily represent finance leases that have been signed but whose lease terms have not yet commenced[123](index=123&type=chunk) - Capital expenditure commitments represent unpaid capital contributions to associates[123](index=123&type=chunk) - Property and equipment commitments primarily represent amounts payable for operating lease assets that have been signed but not yet recognized in the financial statements[123](index=123&type=chunk) [10. Use of Net Proceeds from Subscription of Domestic Shares](index=32&type=section&id=10.%20%E5%85%A7%E8%B3%87%E8%82%A1%E8%AA%8D%E8%B3%BC%E6%89%80%E5%BE%97%E6%AC%BE%E6%B7%A8%E9%A1%8D%E7%9A%84%E7%94%A8%E9%80%94) The company successfully issued 282 million new domestic shares to Zhongguancun JinFu and Wangjing Zongkai, raising approximately RMB 507 million in net proceeds to strengthen capital, enhance competitiveness, accelerate strategic transformation, improve credit ratings, boost financing capabilities, elevate brand influence, and optimize capital structure; as of June 30, 2025, RMB 195.6 million has been used for finance lease and industry-finance integration businesses, with the remaining funds to be utilized in the second half of 2025 - Successfully issued **282 million new domestic shares**, raising net proceeds of approximately **RMB 507 million**[126](index=126&type=chunk) - The purpose of the subscription includes strengthening capital, enhancing market competitiveness, accelerating strategic transformation, improving credit ratings, boosting financing capabilities, elevating brand influence, and optimizing capital structure[125](index=125&type=chunk) - As of June 30, 2025, **RMB 195.6 million** has been used, with the remaining **RMB 311.6 million** to be utilized in the second half of 2025 for developing finance lease and industry-finance integration businesses[126](index=126&type=chunk) Use of Net Proceeds from Domestic Share Subscription | Planned Use | Planned Amount (RMB million) | Amount Used (RMB million) | Remaining Amount (RMB million) | Planned Usage Time | | :--- | :--- | :--- | :--- | :--- | | Development of finance lease business | 456.5 | 145.0 | 311.5 | Before December 31, 2025 | | Development of industry-finance integration business | 50.7 | 50.6 | 0.1 | Before December 31, 2025 | [11. Future Outlook](index=33&type=section&id=11.%20%E6%9C%AA%E4%BE%86%E5%B1%95%E6%9C%9B) In the second half of 2025, the company will continue to pursue its goals, actively adapt, leverage the unique "Zhongguancun Technology Leasing Model," deeply integrate industrial operations with technology finance, achieve business structure transformation and upgrading, and continuously enhance intrinsic value for investors and society - In the second half of 2025, the company will continue to firmly pursue its goals, actively seek change, and innovate to address external uncertainties with its own certainty[128](index=128&type=chunk) - Leverage the unique role of the "Zhongguancun Technology Leasing Model" to promote deep integration of industrial operations and technology finance, achieving business structure transformation and upgrading[128](index=128&type=chunk) [12. Future Plans for Material Investments or Capital Assets](index=33&type=section&id=12.%20%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E6%88%96%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) As of June 30, 2025, the company had no future plans for material investments or capital assets - As of June 30, 2025, the company had no future plans for material investments or capital assets[129](index=129&type=chunk) [Condensed Consolidated Financial Statements](index=34&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=34&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E6%90%8D%E7%9B%8A%E8%A1%A8%E5%8F%8A%E5%85%B6%E4%BB%96%E7%B6%9C%E5%90%88%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the Group reported revenue of RMB 417.5 million and net profit of RMB 144.3 million, a 5.1% year-on-year increase, with total comprehensive income for the period at RMB 144.9 million and basic and diluted earnings per share at RMB 0.11 Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income Summary | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Revenue | 417,472 | 423,564 | | Profit before tax | 192,130 | 183,201 | | Net profit for the period | 144,311 | 137,256 | | Other comprehensive income | 606 | – | | Total comprehensive income for the period | 144,917 | 137,256 | | Basic and diluted earnings per share (RMB) | 0.11 | 0.10 | [Condensed Consolidated Statement of Financial Position](index=35&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the Group's total assets were RMB 12,851.4 million, with non-current assets at RMB 5,047.8 million and current assets at RMB 7,803.6 million; total liabilities were RMB 9,713.2 million, with current liabilities at RMB 5,824.4 million; net assets and total equity attributable to shareholders were RMB 3,138.2 million Condensed Consolidated Statement of Financial Position Summary | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current assets | 5,047,821 | 5,179,451 | | Current assets | 7,803,588 | 7,876,363 | | Total assets | 12,851,409 | 13,055,814 | | Current liabilities | 5,824,442 | 6,324,297 | | Non-current liabilities | 3,888,801 | 4,150,142 | | Total liabilities | 9,713,243 | 10,474,439 | | Net assets | 3,138,166 | 2,581,375 | | Total equity attributable to shareholders of the Company | 3,138,166 | 2,581,375 | [Condensed Consolidated Statement of Changes in Equity](index=37&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%82%A1%E6%9D%B1%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) As of June 30, 2025, total shareholders' equity increased from RMB 2,581.4 million at the beginning of the year to RMB 3,138.2 million, primarily due to total comprehensive income of RMB 144.9 million and proceeds from share issuance of RMB 507.2 million, offset by dividends paid of RMB 95.3 million Condensed Consolidated Statement of Changes in Equity Summary | Item | January 1, 2025 (RMB thousand) | Total comprehensive income for the period (RMB thousand) | Shares issued (RMB thousand) | Dividends (RMB thousand) | June 30, 2025 (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | :--- | | Total shareholders' equity | 2,581,375 | 144,917 | 507,165 | (95,291) | 3,138,166 | [Condensed Consolidated Statement of Cash Flows](index=39&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For the six months ended June 30, 2025, net cash from operating activities was RMB 721.4 million; net cash used in investing activities was RMB 220.1 million, mainly for equipment and intangible asset purchases; net cash used in financing activities was RMB 136.7 million, despite obtaining RMB 3,433.1 million in borrowings, offset by RMB 3,920.0 million in repayments; cash and cash equivalents at period-end increased by RMB 364.6 million to RMB 1,205.5 million Condensed Consolidated Statement of Cash Flows Summary | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Net cash generated from operating activities | 721,366 | 847,082 | | Net cash used in investing activities | (220,109) | (76,509) | | Net cash used in financing activities | (136,699) | (827,721) | | Net increase in cash and cash equivalents | 364,558 | (57,148) | | Cash and cash equivalents at June 30 | 1,205,511 | 578,111 | [Notes to the Unaudited Interim Financial Report](index=40&type=section&id=%E6%9C%AA%E7%B6%93%E5%AF%A9%E8%A8%88%E4%B8%AD%E6%9C%9F%E8%B2%A1%E5%8B%99%E5%A0%B1%E5%91%8A%E9%99%84%E8%A8%BB) [1. General Information](index=40&type=section&id=1.%20%E5%9F%BA%E6%9C%AC%E6%83%85%E6%B3%81) Zhongguancun Technology Leasing Co., Ltd. was established in Beijing, China, restructured into a joint stock company in 2019, and listed on the Hong Kong Stock Exchange on January 21, 2020 - The Company was established in Beijing, People's Republic of China, restructured into a joint stock company on August 16, 2019, and its H shares were listed on the Hong Kong Stock Exchange on January 21, 2020[136](index=136&type=chunk) [2. Basis of Preparation](index=40&type=section&id=2.%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E7%A4%8E) This interim financial report is prepared in accordance with the Hong Kong Stock Exchange Listing Rules and International Accounting Standard 34, comprising condensed consolidated financial statements and explanatory notes, and has been reviewed by Deloitte Touche Tohmatsu - This interim financial report is prepared in accordance with the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited and International Accounting Standard 34 – Interim Financial Reporting[137](index=137&type=chunk) - This report was approved for issue on August 28, 2025, and has been reviewed by Deloitte Touche Tohmatsu in accordance with International Standard on Review Engagements 2410[138](index=138&type=chunk) [3. Accounting Policies](index=40&type=section&id=3.%20%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value; the first-time application of IAS 21 (amended): Lack of Exchangeability during this interim period had no significant impact on financial position or performance - The condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value[139](index=139&type=chunk) - The first-time application of IAS 21 (amended): Lack of Exchangeability during this interim period had no significant impact on financial position or performance[139](index=139&type=chunk) [4. Revenue](index=41&type=section&id=4.%20%E6%94%B6%E7%9B%8A) The Group's primary business involves providing leasing and consulting services, with revenue comprising finance lease interest income, sale and leaseback interest income, intellectual property lease income, management consulting fees, policy consulting fees, and operating lease income; no single customer transaction exceeded 10% of total revenue during the reporting period - The Group's primary business is to provide leasing services and related consulting services, with no single customer transaction exceeding **10%** of total revenue[140](index=140&type=chunk) Revenue by Major Category | Revenue Category | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Finance lease interest income | 36,223 | 32,022 | | Sale and leaseback interest income | 281,456 | 296,427 | | Intellectual property lease income | 24,326 | 37,416 | | Management consulting fee income | 17,915 | 16,121 | | Policy consulting fee income | 42,284 | 37,991 | | Operating lease income | 15,268 | 3,587 | | Total | 417,472 | 423,564 | [5. Other Net Income](index=41&type=section&id=5.%20%E5%85%B6%E4%BB%96%E6%B7%A8%E6%94%B6%E5%85%A5) Other net income primarily includes bank deposit interest, government grants, and fair value changes of financial assets measured at fair value through profit or loss; government grants, awarded for financing services to technology innovation enterprises in specific regions, are recognized as income upon receipt Other Net Income Details | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Deposit interest | 1,901 | 2,045 | | Government grants | 1,642 | 148 | | Fair value changes of financial assets measured at fair value through profit or loss | 405 | – | | Other | 5 | 119 | | Total | 3,953 | 2,312 | - Government grants are mainly for rewarding finance lease companies that provide financing services to technology innovation enterprises in specific regions, and are recognized as income upon receipt as they are unconditional[142](index=142&type=chunk) [6. Interest Expense](index=42&type=section&id=6.%20%E5%88%A9%E6%81%AF%E6%94%AF%E5%87%BA) Interest expense primarily comprises borrowing interest, estimated interest expense on interest-free security deposits from lessees, and lease liability interest expense, totaling RMB 129.4 million for the six months ended June 30, 2025 Interest Expense Details | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Borrowings | 98,286 | 119,196 | | Estimated interest expense on interest-free security deposits from lessees | 24,673 | 26,757 | | Lease liabilities interest expense | 174 | 414 | | Other | 6,273 | – | | Total | 129,406 | 146,367 | [7. Operating Expenses](index=42&type=section&id=7.%20%E7%B6%93%E7%87%9F%E9%96%8B%E6%94%AF) Operating expenses include staff costs, depreciation and amortization, regional enterprise service fees, professional service fees, office and travel expenses, public maintenance fees, business development fees, auditor's remuneration, and other expenses, totaling RMB 69.8 million for the six months ended June 30, 2025 Operating Expenses Details | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Staff costs | 30,824 | 37,387 | | Depreciation and amortization | 19,648 | 9,467 | | Regional enterprise service fees | 4,738 | 3,444 | | Professional service fees | 1,652 | 1,513 | | Office and travel expenses | 2,209 | 2,278 | | Public maintenance fees | 866 | 981 | | Business development fees | 1,344 | 870 | | Auditor's remuneration | 830 | 830 | | Other | 7,693 | 11,770 | | Total operating expenses | 69,804 | 68,540 | [8. Impairment recognized under Expected Credit Loss model, net](index=43&type=section&id=8.%20%E9%A0%90%E6%9C%9F%E4%BF%A1%E7%94%A8%E6%90%8D%E5%A4%B1%E6%A8%A1%E5%9E%8B%E4%B8%8B%E7%A2%BA%E8%AA%8D%E7%9A%84%E6%B7%A8%E9%A1%8D) Net impairment recognized under the expected credit loss model is primarily related to loans and receivables, amounting to RMB 33.8 million for the six months ended June 30, 2025 Impairment recognized under Expected Credit Loss model, net details | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Loans and receivables | 33,790 | 30,774 | | Credit commitments | – | – | | Total | 33,790 | 30,774 | [9. Income Tax in Condensed Consolidated Statement of Profit or Loss](index=43&type=section&id=9.%20%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E6%90%8D%E7%9B%8A%E8%A1%A8%E5%85%A7%E7%9A%84%E6%89%80%E5%BE%97%E7%A8%85) Income tax expense in the condensed consolidated statement of profit or loss includes current China corporate income tax provision and deferred income tax; the company is subject to a statutory corporate income tax rate of 25% in China Income Tax in Condensed Consolidated Statement of Profit or Loss Details | Item | 2025 (RMB thousand) | 2024 (RMB thousand) | | :--- | :--- | :--- | | Current tax – provision for China corporate income tax for the period | 55,089 | 44,323 | | Deferred tax – (generated) / reversed temporary differences | (7,270) | 1,622 | | Total | 47,819 | 45,945 | - The Company is subject to China corporate income tax at a statutory rate of **25%**[148](index=148&type=chunk) [10. Basic and Diluted Earnings Per Share](index=43&type=section&id=10.%20%E5%9F%BA%E6%9C%AC%E5%8F%8A%E7%A8%80%E9%87%8B%E6%AF%8F%E8%82%A1%E6%94%B6%E7%9B%8A) Basic earnings per share is calculated based on net profit attributable to shareholders of RMB 144.3 million and a weighted average of 1,339.6 million ordinary shares outstanding during the interim period; basic and diluted earnings per share are identical as there were no potentially dilutive shares outstanding - Basic earnings per share is calculated based on net profit attributable to shareholders of the Company of **RMB 144.3 million** and a weighted average of **1,339.6 million** ordinary shares outstanding during the interim period[149](index=149&type=chunk) - Basic and diluted earnings per share are identical as there were no potentially dilutive shares outstanding during the reporting period[149](index=149&type=chunk) [11. Property and Equipment](index=44&type=section&id=11.%20%E7%89%A9%E6%A5%AD%E5%92%8C%E8%A8%AD%E5%82%99) As of June 30, 2025, the carrying value of property and equipment was RMB 307.2 million, primarily comprising operating lease equipment, self-use leased properties, electronic equipment, office equipment, and other items; purchases during the period amounted to RMB 244.4 million, and disposals and other changes were RMB 41.3 million - As of June 30, 2025, the carrying value of property and equipment was **RMB 307.2 million**[150](index=150&type=chunk) - Purchases during the period amounted to **RMB 244.4 million**, and disposals and other changes were **RMB 41.3 million**[150](index=150&type=chunk) [12. Loans and Receivables](index=45&type=section&id=12.%20%E8%B2%B8%E6%AC%BE%E5%8F%8A%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) Total loans and receivables amounted to RMB 10,946.8 million, with impairment provisions of RMB 278.9 million, resulting in a carrying value of RMB 10,667.9 million; these primarily include finance lease receivables, sale and leaseback receivables, and intellectual property lease receivables; during the reporting period, the Group established a trust plan for certain credit-impaired loans and receivables and transferred the beneficiary rights, incurring no profit or loss Loans and Receivables Details | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Net finance lease receivables | 1,241,252 | 1,261,433 | | Sale and leaseback receivables | 9,082,788 | 9,788,885 | | Intellectual property lease receivables | 622,723 | 896,642 | | Total loans and receivables | 10,946,763 | 11,946,960 | | Less: Impairment provision for loans and receivables | (278,863) | (441,866) | | Total | 10,667,900 | 11,505,094 | - In June 2025, the Group established a trust plan for certain loans and receivables that had incurred credit impairment over their entire lifetime, and transferred the beneficiary rights to shareholders for a consideration of approximately **RMB 20 million**, resulting in no profit or loss[154](index=154&type=chunk) [13. Investments in Associates](index=48&type=section&id=13.%20%E5%B0%8D%E8%81%AF%E7%87%9F%E4%BC%81%E6%A5%AD%E7%9A%84%E6%8A%95%E8%B3%87) The Group's investments in associates totaled RMB 305.2 million, primarily long-term equity investments in investment management and consulting service companies such as Beijing Zhongnuo Tongchuang Investment Fund Management Co., Ltd. and Jiangsu Zhongguancun Zhongnuo Collaborative Investment Fund Partnership; all associates are unlisted companies or partnerships accounted for using the equity method - Investments in associates totaled **RMB 305.2 million**[159](index=159&type=chunk) - Primarily invested in investment management and consulting service companies; all associates are unlisted companies or partnerships accounted for using the equity method[156](index=156&type=chunk)[157](index=157&type=chunk)[158](index=158&type=chunk) [14. Income Tax in Condensed Consolidated Statement of Financial Position](index=49&type=section&id=14.%20%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8%E5%85%A7%E7%9A%84%E6%89%80%E5%BE%97%E7%A8%85) Deferred income tax assets amounted to RMB 117.9 million, primarily arising from temporary differences between financial reporting net profit and taxable income; income tax payable was RMB 12.3 million - Deferred income tax assets amounted to **RMB 117.9 million**[161](index=161&type=chunk) - Income tax payable amounted to **RMB 12.3 million**[162](index=162&type=chunk) [15. Other Assets](index=49&type=section&id=15.%20%E5%85%B6%E4%BB%96%E8%B3%87%E7%94%A2) Total other assets amounted to RMB 131.8 million, including non-current other assets, deductible VAT, prepayments, amounts due from related parties, and other receivables Other Assets Details | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Non-current assets – other assets | 9,364 | 3,086 | | Current assets – deductible VAT | 99,456 | 77,222 | | Current assets – prepayments | 17,605 | 4,112 | | Current assets – amounts due from related parties | 5,287 | 5,288 | | Current assets – other receivables | 137 | 373 | | Total | 131,849 | 90,081 | [16. Accounts Receivable](index=50&type=section&id=16.%20%E6%87%89%E6%94%B6%E8%B3%87%E6%AC%BE) Accounts receivable, primarily operating lease receivables, amounted to RMB 8.2 million as of June 30, 2025, all due within one year - Accounts receivable, primarily operating lease receivables, amounted to **RMB 8.2 million** as of June 30, 2025[164](index=164&type=chunk) - All accounts receivable are due within one year[164](index=164&type=chunk) [17. Cash and Cash Equivalents](index=50&type=section&id=17.%20%E7%8F%BE%E9%87%91%E5%8F%8A%E7%8F%BE%E9%87%91%E7%AD%89%E5%83%B9%E7%89%A9) As of June 30, 2025, cash and cash equivalents in the form of bank deposits amounted to RMB 1,205.5 million - As of June 30, 2025, cash and cash equivalents in the form of bank deposits amounted to **RMB 1,205.5 million**[164](index=164&type=chunk) [18. Borrowings](index=50&type=section&id=18.%20%E5%80%9F%E6%AC%BE) Total borrowings amounted to RMB 7,436.0 million, including bank loans (pledged and unpledged), asset-backed securities and notes, and credit bonds; current borrowings accounted for 57.5% and non-current for 42.5%, with contractual interest rates ranging from floating rates (LPR-10bps to +60bps) to fixed rates (2.35%-4.60%) Borrowings Details | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Bank loans – pledged | 983,898 | 1,427,217 | | Bank loans – unpledged | 1,350,916 | 1,917,776 | | Asset-backed securities and notes | 4,192,205 | 3,656,920 | | Credit bonds | 909,008 | 1,006,311 | | Total | 7,436,027 | 8,008,224 | - Current borrowings accounted for **57.5%** of total borrowings, and non-current borrowings for **42.5%**[164](index=164&type=chunk) - Contractual interest rates for borrowings ranged from floating rates (Loan Prime Rate -10bps to +60bps) to fixed rates (**2.35%-4.60%**)[165](index=165&type=chunk) [19. Trade and Other Liabilities](index=51&type=section&id=19.%20%E8%B2%BF%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E8%B2%A0%E5%82%B5) Total trade and other liabilities amounted to RMB 2,264.9 million, including bills payable, security deposits from lessees, accounts payable, dividends payable, deferred income, accrued staff costs, and lease liabilities, with bills payable and security deposits from lessees being the main components Trade and Other Liabilities Details | Item | June 30, 2025 (RMB thousand) | December 31, 2024 (RMB thousand) | | :--- | :--- | :--- | | Current liabilities – bills payable | 673,069 | 920,434 | | Current liabilities – security deposits from lessees | 416,482 | 494,415 | | Current liabilities – accounts payable | 234,165 | 150,838 | | Current liabilities – dividends payable | 95,291 | – | | Non-current liabilities – security deposits from lessees | 704,147 | 748,041 | | Total | 2,264,923 | 2,443,414 | - Accrued staff costs include accrued bonuses and defined contribution retirement plans[167](index=167&type=chunk) [20. Capital, Reserves and Dividends](index=52&type=section&id=20.%20%E8%B3%87%E6%9C%AC%EF%BC%8C%E5%84%B2%E5%82%99%E5%8F%8A%E8%82%A1%E6%81%AF) As of June 30, 2025, total share capital was RMB 1,615.1 million, comprising domestic and H shares, with an increase due to the issuance of 282 million new domestic shares to two companies; reserves include capital reserve, surplus reserve, fair value reserve, and general reserve; dividends approved but not yet distributed for the interim period amounted to RMB 95.3 million Share Capital | Share Class | Number of Shares (thousand shares) | Share Capital (RMB thousand) | | :--- | :--- | :--- | | Domestic shares (as of June 30, 2025) | 1,121,768 | 1,121,768 | | H shares (as of June 30, 2025) | 493,334 | 493,334 | | Total | 1,615,102 | 1,615,102 | - In June 2025, **282 million new domestic shares** were issued, increasing total share capital to **1,615.1 million shares**[168](index=168&type=chunk) - Capital reserve primarily includes capital reserve arising from the conversion from a limited liability company to a joint stock company and share premium[169](index=169&type=chunk) - Reserves include surplus reserve, fair value reserve, and general reserve[170](index=170&type=chunk)[172](index=172&type=chunk)[173](index=173&type=chunk) - Dividends approved but not yet distributed for this interim period amounted to **RMB 95.3 million**[174](index=174&type=chunk) [21. Financial Risk Management and Fair Value Measurement of Financial Instruments](index=53&type=section&id=21.%20%E9%87%91%E8%9E%8D%E9%A2%A8%E9%9A%AA%E7%AE%A1%E7%90%86%E5%92%8C%E9%87%91%E8%9E%8D%E5%B7%A5%E5%85%B7%E7%9A%84%E5%85%AC%E5%85%81%E5%83%B9%E5%80%BC%E8%A8%88%E9%87%8F) Risk management policies remained unchanged during the reporting period; the Group determines and discloses the fair value of financial instruments based on Level 1, Level 2, and Level 3, with fair value of unlisted investments determined using the net asset method, classified as Level 3 measurement - Risk management policies did not undergo significant changes during the reporting period[175](index=175&type=chunk) - The fair value of financial instruments is determined and disclosed based on Level 1, Level 2, and Level 3[175](index=175&type=chunk) - The fair value of unlisted investments is determined using the net asset method and is classified as Level 3 measurement[178](index=178&type=chunk) Fair Value Measurement Level Distribution | Financial Asset Category | Level 1 (RMB thousand) | Level 2 (RMB thousand) | Level 3 (RMB thousand) | Total (RMB thousand) | | :--- | :--- | :--- | :--- | :--- | | Financial assets me

[Financial Highlights](index=1&type=section&id=Financial%20Highlights) Lao Heng He Brewing Co., Ltd. announced its interim results for the six months ended June 30, 2025, with revenue flat year-on-year, gross profit down 10.7%, and loss attributable to owners of the Company increasing by 1.6%; the Board does not recommend an interim dividend Financial Highlights for H1 2025 | Metric | H1 2025 (RMB millions) | H1 2024 (RMB millions) | Year-on-year change (%) | | :--- | :--- | :--- | :--- | | Revenue | 144.4 | 144.4 | 0.0 | | Gross Profit | 42.1 | 47.1 | -10.7 | | Loss attributable to owners of the Company | 251.7 | 247.6 | 1.6 | | Interim Dividend | N/A | N/A | - | [Financial Statements and Notes](index=2&type=section&id=Financial%20Statements%20and%20Notes) This section provides the condensed consolidated interim financial statements for the six months ended June 30, 2025, including the income statement, statement of comprehensive income, statement of financial position, and related notes detailing company information, accounting policies, going concern assumptions, operating segments, revenue, expenses, borrowings, inventories, receivables, payables, and share capital [Condensed Consolidated Interim Income Statement](index=2&type=section&id=Condensed%20Consolidated%20Interim%20Income%20Statement) For the six months ended June 30, 2025, the company's revenue remained largely flat year-on-year, but increased cost of sales led to a decrease in gross profit; administrative expenses decreased, but other expenses and finance costs remained high, resulting in a slight increase in loss for the period Key Data from Condensed Consolidated Interim Income Statement | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Revenue | 144,422 | 144,277 | | Cost of sales | (102,367) | (97,169) | | Gross profit | 42,055 | 47,108 | | Other income and gains | 275 | 1,417 | | Selling and distribution expenses | (44,762) | (44,168) | | Administrative expenses | (12,586) | (19,053) | | Impairment losses, net | (1,750) | (393) | | Other expenses | (135,915) | (132,253) | | Finance costs | (98,994) | (100,262) | | Loss before income tax | (251,677) | (247,604) | | Income tax expense | – | – | | Loss for the period | (251,677) | (247,604) | | Basic and diluted loss per share (RMB) | (0.43) | (0.43) | [Condensed Consolidated Interim Statement of Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Comprehensive%20Income) For the six months ended June 30, 2025, the company's loss for the period was RMB 251,677 thousand, a slight increase from the prior year, with other comprehensive income primarily affected by exchange differences on overseas operations, leading to a small rise in total comprehensive expense for the period Key Data from Condensed Consolidated Interim Statement of Comprehensive Income | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Loss for the period | (251,677) | (247,604) | | Items that may be reclassified subsequently to profit or loss: | | | | — Exchange differences on translation of overseas operations | 777 | (3,055) | | Total comprehensive expense for the period | (250,900) | (250,659) | [Condensed Consolidated Interim Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Interim%20Statement%20of%20Financial%20Position) As of June 30, 2025, the company's total non-current assets and total current assets both slightly decreased, while total current liabilities significantly increased, further expanding net current liabilities and net liabilities, and continuing to increase the total deficit Key Data from Condensed Consolidated Interim Statement of Financial Position | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Total non-current assets | 290,053 | 298,155 | | Total current assets | 734,444 | 752,212 | | Total current liabilities | 4,107,063 | 3,894,099 | | Net current liabilities | (3,372,619) | (3,141,887) | | Total assets less current liabilities | (3,082,566) | (2,843,732) | | Non-current liabilities | 19,878 | 7,812 | | Net liabilities | (3,102,444) | (2,851,544) | | Share capital | 1,767 | 1,767 | | Reserves | (3,104,211) | (2,853,311) | | Total deficit | (3,102,444) | (2,851,544) | [Company Information](index=6&type=section&id=Company%20Information) Lao Heng He Brewing Co., Ltd. was incorporated in the Cayman Islands and primarily engages in the production and sale of "Lao Heng He" branded seasonings in China, listed on the Main Board of the Hong Kong Stock Exchange since January 28, 2014 - The company was incorporated in the Cayman Islands and primarily engages in the production and sale of "Lao Heng He" branded seasonings in China[9](index=9&type=chunk) - The company's shares have been listed on the Main Board of the Hong Kong Stock Exchange since **January 28, 2014**[10](index=10&type=chunk) [Basis of Preparation, Accounting Policies and Changes in Disclosures](index=6&type=section&id=Basis%20of%20Preparation%2C%20Accounting%20Policies%20and%20Changes%20in%20Disclosures) The interim financial information is prepared in accordance with IAS 34 and the HKEX Listing Rules, based on a going concern assumption; however, the company faces severe liquidity challenges, including net cash outflow from operating activities, net loss, net current liabilities, and a capital deficit, indicating significant uncertainty about its ability to continue as a going concern, but management has formulated several measures to address these issues, and changes in accounting policies have no material impact on the current financial information [Basis of Preparation](index=6&type=section&id=Basis%20of%20Preparation) The Group's unaudited condensed consolidated interim financial statements are prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the applicable disclosure requirements of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited - Interim financial information is prepared in accordance with **IAS 34** and the **HKEX Listing Rules**[11](index=11&type=chunk) [Going Concern Assumption](index=7&type=section&id=Going%20Concern%20Assumption) The company faces severe liquidity challenges, including net cash outflow from operating activities, net loss, substantial net current liabilities, and a capital deficit; despite significant uncertainties, the Board considers the preparation of financial information on a going concern basis appropriate, based on the direct holding company's commitment to continuous financial support, active negotiations with major lenders for loan renewals and new credit facilities, and internal business plans such as cost control and sales forecasting - For the six months ended June 30, 2025, the Group's net cash used in operating activities was approximately **RMB 45.97 million**, generating a net loss of approximately **RMB 251.68 million**[12](index=12&type=chunk) - As of June 30, 2025, the Group's net current liabilities were approximately **RMB 3,372.62 million**, with a capital deficit of approximately **RMB 3,102.44 million** and accumulated losses of approximately **RMB 3,970.10 million**[12](index=12&type=chunk) - The Group's total borrowings were approximately **RMB 3,570.92 million**, of which current borrowings were approximately **RMB 3,569.95 million**, with approximately **RMB 1,919.78 million** overdue[13](index=13&type=chunk) - Wuxing Chengtou (Hong Kong) Co., Ltd., the direct holding company, has committed to continuous financial support, and major lenders (Huzhou Wuxing City, Nan Taihu, Husheng Financing) have expressed active support and committed to providing approximately **RMB 450 million** in new credit facilities[14](index=14&type=chunk) - The directors have formulated business plans to improve liquidity by monitoring production activities, tightening cost control, and seeking feasible financial arrangements[15](index=15&type=chunk) [Accounting Policies and Changes in Disclosures](index=8&type=section&id=Accounting%20Policies%20and%20Changes%20in%20Disclosures) The accounting policies for the current financial information are consistent with the previous year, with only the adoption of the revised IAS 21 "Lack of Exchangeability" effective January 1, 2025, which has no material impact on the Group's financial information - The adoption of the revised **IAS 21 "Lack of Exchangeability"** has no material impact on the Group's interim financial information[17](index=17&type=chunk)[18](index=18&type=chunk) [Operating Segment Information](index=9&type=section&id=Operating%20Segment%20Information) The Group primarily operates as a single business unit, the food segment, engaged in the production and sale of seasonings; all revenue and non-current assets are derived from China, thus no geographical information is presented, and Customer A is one of the major customers for the period - The Group operates as a single business unit, the food segment, engaged in the production and sale of seasonings[19](index=19&type=chunk) - All of the Group's revenue and identifiable non-current assets are located in China[19](index=19&type=chunk) Major Customer Revenue Contribution | Customer | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Customer A | 13,356 | 15,062 | [Revenue, Other Income and Gains](index=10&type=section&id=Revenue%2C%20Other%20Income%20and%20Gains) Current period revenue, primarily from the sale of seasonings, remained flat year-on-year, while other income and gains significantly decreased, mainly due to a reduction in other interest income Revenue Composition | Type of Goods | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Seasonings | 144,422 | 144,277 | Other Income and Gains | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Subsidies received | 214 | 47 | | Bank interest income | 3 | 5 | | Exchange gains, net | – | 214 | | Other interest income | – | 1,031 | | Others | 58 | 120 | | **Total** | **275** | **1,417** | - Performance obligations are satisfied upon delivery of products, with payments generally due within **30 to 90 days** after delivery[25](index=25&type=chunk) [Loss Before Income Tax](index=11&type=section&id=Loss%20Before%20Income%20Tax) The loss before income tax for the current period was primarily influenced by employee benefit expenses, depreciation, impairment losses on inventories, cost of inventories recognized as expense, and overdue surtaxes and interest expenses Major Components of Loss Before Income Tax | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Employee benefit expenses | 21,145 | 22,867 | | Depreciation | 14,448 | 14,794 | | Impairment losses, net (inventories) | 1,750 | – | | Cost of inventories recognized as expense | 102,367 | 97,169 | | Research and development costs | 6,493 | 6,716 | | Overdue surtaxes | 14,672 | 17,585 | | Overdue interest expenses | 121,069 | 114,367 | [Finance Costs](index=12&type=section&id=Finance%20Costs) Finance costs for the current period slightly decreased, primarily comprising interest on bank loans, other borrowings, and lease liabilities Finance Costs Details | Item | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | | :--- | :--- | :--- | | Interest on bank loans | 1,716 | 1,974 | | Interest on other borrowings | 97,218 | 98,205 | | Interest on lease liabilities | 60 | 83 | | **Total** | **98,994** | **100,262** | [Income Tax Expense](index=12&type=section&id=Income%20Tax%20Expense) Due to the Group's continuous tax losses, no China income tax provision was made for the current period or the prior corresponding period, resulting in zero income tax expense - Due to the Group's tax losses, there was no China income tax expense for the current period or the prior corresponding period[30](index=30&type=chunk) [Loss Per Share Attributable to Owners of the Company](index=12&type=section&id=Loss%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Company) Basic and diluted loss per share for the current period remained at RMB 0.43, consistent with the prior year, calculated based on the loss for the period and the weighted average number of ordinary shares outstanding Loss Per Share Calculation | Metric | H1 2025 | H1 2024 | | :--- | :--- | :--- | | Loss attributable to owners of the Company (RMB thousands) | (251,677) | (247,604) | | Weighted average number of ordinary shares (thousands of shares) | 578,750 | 578,750 | | Basic and diluted loss per share (RMB) | (0.43) | (0.43) | - Basic loss per share was not diluted as there were no potentially dilutive ordinary shares outstanding during the period[31](index=31&type=chunk) [Dividends](index=13&type=section&id=Dividends) The Board does not recommend the payment of any interim dividend for the six months ended June 30, 2025, consistent with the prior corresponding period - The company does not propose to pay an interim dividend for the six months ended June 30, 2025[32](index=32&type=chunk) [Property, Plant and Equipment](index=13&type=section&id=Property%2C%20Plant%20and%20Equipment) The total cost of purchases for property, plant and equipment increased in the current period compared to the prior year, while some plant and equipment were disposed of, resulting in a loss - The total cost of purchases for property, plant and equipment in the current period was approximately **RMB 7.13 million**, an increase from approximately **RMB 4.62 million** in the prior corresponding period[33](index=33&type=chunk) - A loss of approximately **RMB 33 thousand** was recorded on the disposal of certain plant and equipment[33](index=33&type=chunk) [Inventories](index=13&type=section&id=Inventories) As of June 30, 2025, total inventories slightly decreased, with work in progress accounting for the largest proportion Inventories Composition | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Raw materials | 11,976 | 11,742 | | Work in progress | 540,847 | 562,479 | | Finished goods | 11,581 | 11,865 | | **Total** | **564,404** | **586,086** | [Trade Receivables](index=13&type=section&id=Trade%20Receivables) As of June 30, 2025, net trade receivables slightly increased, with credit terms typically ranging from one to three months; the aging analysis shows that most receivables are within three months Net Trade Receivables | Metric | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Trade receivables, gross | 28,620 | 27,893 | | Less: Provision for credit losses | (2,673) | (2,673) | | Trade receivables, net | 25,947 | 25,220 | - Trade terms between the Group and its customers are primarily on credit, with credit periods typically ranging from **one to three months**[35](index=35&type=chunk) Aging Analysis of Trade Receivables | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 3 months | 20,366 | 20,850 | | 3 to 6 months | 5,296 | 3,876 | | 6 months to 1 year | 285 | 494 | | **Total** | **25,947** | **25,220** | [Prepayments, Other Receivables and Other Assets](index=14&type=section&id=Prepayments%2C%20Other%20Receivables%20and%20Other%20Assets) As of June 30, 2025, the total of prepayments, recoverable VAT, deposits, and other receivables slightly decreased, with recoverable VAT constituting the major portion Composition of Prepayments, Other Receivables and Other Assets | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Prepayments | 2,812 | 2,838 | | Recoverable VAT | 113,370 | 114,121 | | Deposits and other receivables | 20,748 | 20,595 | | **Total** | **136,803** | **137,681** | | Less: Portion classified as non-current assets | (1,993) | (2,455) | | **Current portion** | **134,348** | **135,688** | [Cash and Cash Equivalents and Pledged Deposits](index=15&type=section&id=Cash%20and%20Cash%20Equivalents%20and%20Pledged%20Deposits) As of June 30, 2025, cash and bank balances slightly decreased, while pledged deposits increased; RMB is the primary currency of denomination Cash and Cash Equivalents and Pledged Deposits | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Cash and bank balances | 6,346 | 5,781 | | Pledged deposits | 708 | 191 | | **Total** | **6,537** | **6,489** | | Of which: Cash and cash equivalents | 5,781 | 6,346 | | Denominated in: RMB | 4,697 | 4,533 | | HKD | 878 | 1,489 | | USD | 370 | 160 | [Trade Payables](index=15&type=section&id=Trade%20Payables) As of June 30, 2025, total trade payables slightly decreased, with most settled within three months; trade payables are non-interest-bearing and typically due within one to six months Aging Analysis of Trade Payables | Aging | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Within 3 months | 25,912 | 30,858 | | 3 to 6 months | 19,553 | 17,969 | | Over 6 months | 11,676 | 9,211 | | **Total** | **57,141** | **58,038** | - Trade payables are non-interest-bearing and typically due within **one to six months**[40](index=40&type=chunk) [Other Payables and Accrued Expenses](index=16&type=section&id=Other%20Payables%20and%20Accrued%20Expenses) As of June 30, 2025, the total of other payables and accrued expenses decreased, primarily including contract liabilities, other taxes payable, provision for overdue tax surcharges, and payables for equipment and construction costs Composition of Other Payables and Accrued Expenses | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Contract liabilities | 9,242 | 50,729 | | Other taxes payable | 37,011 | 38,822 | | Other payables and accrued expenses | 355,392 | 353,345 | | Amount due to a director | 7 | 7 | | Salaries payable | 5,040 | 9,233 | | **Total** | **406,692** | **452,136** | - Other taxes payable primarily consist of VAT payable of approximately **RMB 26.26 million**[41](index=41&type=chunk) - Other payables and accrued expenses primarily include a provision for overdue tax surcharges of approximately **RMB 262.14 million** and payables for equipment and construction costs of approximately **RMB 7.38 million**[41](index=41&type=chunk) [Interest-Bearing Bank and Other Borrowings](index=17&type=section&id=Interest-Bearing%20Bank%20and%20Other%20Borrowings) As of June 30, 2025, total interest-bearing bank and other borrowings increased, with most being secured other borrowings; approximately RMB 1,919.78 million of other borrowings were overdue, and related overdue interest expenses were recognized; some borrowings are secured by assets or guaranteed by an intermediate holding company Total Interest-Bearing Bank and Other Borrowings | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Current lease liabilities | 1,358 | 1,638 | | Unsecured bank loans | 49,000 | 49,000 | | Secured bank loans | 20,000 | 10,000 | | Unsecured other borrowings | 229,212 | 217,739 | | Secured other borrowings | 3,270,383 | 3,031,570 | | Non-current lease liabilities | 966 | 1,393 | | **Total** | **3,570,919** | **3,311,340** | - The Group's total bank loan facilities amount to **RMB 69 million**, with **RMB 69 million** utilized[42](index=42&type=chunk) - Approximately **RMB 1,919.78 million** of other borrowings are overdue, with related overdue interest expenses of approximately **RMB 121.07 million**[45](index=45&type=chunk) - The Group pledged certain assets to lenders as security for bank and other borrowings, including property, plant and equipment, right-of-use assets, and inventories[44](index=44&type=chunk)[45](index=45&type=chunk) - Some other borrowings involve sale and leaseback arrangements for machinery and equipment, which management considers the Group to retain control over the assets, thus recognized as other borrowings rather than asset sales[46](index=46&type=chunk) [Deferred Government Grants](index=19&type=section&id=Deferred%20Government%20Grants) As of June 30, 2025, the Group recognized deferred government grants of RMB 12.54 million, intended to subsidize enterprise technological transformation and enhance existing plant facilities and annual production capacity Deferred Government Grants | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Deferred government grants | 12,542 | – | - The grant is used to subsidize the Group in upgrading existing plant facilities, including the purchase of automated filling lines and automated blending production lines, expected to increase the annual production capacity of seasonings[48](index=48&type=chunk) [Share Capital](index=20&type=section&id=Share%20Capital) As of June 30, 2025, the company's authorized and issued and fully paid share capital remained unchanged Share Capital Details | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Authorized share capital (1,000,000,000 shares of US$0.0005 par value each) | 3,050 | 3,050 | | Issued and fully paid share capital (578,750,000 shares of US$0.0005 par value each) | 1,767 | 1,767 | [Management Discussion and Analysis](index=21&type=section&id=Management%20Discussion%20and%20Analysis) Management discussed the company's operating performance, market strategy, product R&D, quality control, and future outlook for H1 2025; despite challenges like slower-than-expected consumption recovery and intensified industry competition, the company enhanced market competitiveness through quality and efficiency improvements, product innovation, and channel reforms, and will continue to focus on consumer demand, expand diversified sales channels, and elevate brand market position [Performance Review](index=21&type=section&id=Performance%20Review) In H1 2025, the company's revenue was flat year-on-year, but gross profit margin declined due to product mix adjustment (increased sales proportion of mid-to-low-end products); cooking wine products remained the main revenue source, while soy sauce products are being repositioned; the company made progress in product certification, standard revision, market promotion, R&D innovation, and workshop management, but still faces risks such as rising production costs, market expansion costs, new product acceptance, distributor challenges, and economic uncertainty - The company achieved several milestones in H1 2025, including organic product certifications for yellow wine, soy sauce, fermented bean curd, and rose rice vinegar, FSSC22000 system certification for its subsidiary Lao Heng He Winery, and active participation in industry standard revisions[50](index=50&type=chunk)[52](index=52&type=chunk) - In terms of market strategy, the company intensified high-end product packaging, promotional activity planning, online channel layout, and offline key channel promotion, employing a multi-level, multi-channel strategy to enhance brand influence[53](index=53&type=chunk) - Regarding product R&D and quality, the company engaged external technical experts, collaborated with universities, developed new products, improved production line processes, and acquired equipment to strengthen food safety technical assurance capabilities, establishing a full-process digital food safety traceability system[54](index=54&type=chunk) - Sales revenue in H1 2025 was approximately **RMB 144.4 million**, flat compared to **RMB 144.3 million** in H1 2024[56](index=56&type=chunk) - Cooking wine series products remained the main revenue source, accounting for approximately **66.4%** of total revenue; soy sauce product sales revenue was approximately **RMB 15.9 million**, accounting for approximately **11.0%** of total revenue[57](index=57&type=chunk) - Gross profit margin decreased from **32.7%** in H1 2024 to **29.1%** in H1 2025, primarily due to product mix adjustment, with an increased sales proportion of mid-to-low-end products[57](index=57&type=chunk) - Loss attributable to owners of the Company was approximately **RMB 251.7 million**, an increase of approximately **1.6%** year-on-year[58](index=58&type=chunk) - The company faces multiple risks, including rising production costs, changing consumer perceptions, increased market expansion costs, new product market acceptance, distributor challenges, and economic uncertainty[59](index=59&type=chunk) [Goals and Strategies](index=24&type=section&id=Goals%20and%20Strategies) Looking ahead to H2 2025, the company will focus on "streamlining, optimizing structure, and increasing efficiency" and the "one core, two wings" strategy, centering on consumer demand, developing cost-effective products, and accelerating the expansion of new retail models and discount retail channels through product innovation, quality improvement, enhanced marketing, and brand promotion to elevate market position and customer loyalty - The company will be consumer-centric, developing high-quality, cost-effective products, and diversifying resources to develop products suitable for different sales channels[60](index=60&type=chunk) - H2 operating goals include: expanding high-quality customers, improving customized models, establishing a sound quality control system, increasing R&D investment, introducing new technologies and processes, optimizing procurement procedures, reducing procurement costs, and strictly controlling expenses to achieve revenue growth and cost reduction[61](index=61&type=chunk) - The company will focus on product innovation and quality improvement, developing healthy products such as low-sodium, low-fat, low-sugar, low-salt, organic, and additive-free options, and utilizing digital marketing (e.g., social media, content marketing) to enhance online brand exposure[62](index=62&type=chunk) - Accelerate the expansion of new retail models and discount retail channels, building a diversified online channel combining "traditional e-commerce + emerging retail platforms," and focusing on promoting social e-commerce and community linkage to develop a community distribution model with all employees as sales guides[63](index=63&type=chunk) [Financial Review](index=26&type=section&id=Financial%20Review) This section provides a detailed review of the Group's financial performance for the six months ended June 30, 2025, including changes in key indicators such as revenue, costs, profits, various expenses, and loss per share, along with their primary reasons; overall, revenue remained flat, but a decline in gross profit margin led to an expanded loss [Overview](index=26&type=section&id=Overview) The Group's revenue in H1 2025 remained largely flat year-on-year, but gross profit decreased by 10.7%, leading to a 1.6% increase in loss attributable to owners of the Company; both gross profit margin and net loss margin deteriorated, and the gearing ratio increased Overview of Key Financial Indicators | Metric | H1 2025 (RMB thousands) | H1 2024 (RMB thousands) | Year-on-year change (%) | | :--- | :--- | :--- | :--- | | Revenue | 144,422 | 144,277 | 0.1 | | Gross Profit | 42,055 | 47,108 | (10.7) | | Loss attributable to owners of the Company | (251,677) | (247,604) | 1.6 | | Loss before interest, tax, depreciation and amortization | (138,156) | (132,196) | 4.5 | | Loss per share (RMB) | (0.43) | (0.43) | 0 | | Gross profit margin (%) | 29.1 | 32.7 | (11.0) | | Net loss margin attributable to owners of the Company (%) | (174.3) | (171.6) | 1.6 | | Loss before interest, tax, depreciation and amortization margin (%) | (95.7) | (91.6) | 4.5 | | Gearing ratio (%) (June 30, 2025 vs December 31, 2024) | 427.8 | 393.5 | 8.7 | - Gearing ratio is calculated as net debt divided by total equity and net debt, where net debt includes total debt less cash and cash equivalents[66](index=66&type=chunk) [Revenue](index=27&type=section&id=Revenue) The Group's revenue remained flat year-on-year; cooking wine product revenue grew by 4.0%, driven by new product launches, optimized product mix, and increased promotional efforts, while revenue from soy sauce, rice vinegar, and other products decreased by 6.9% due to product mix adjustments and reduced production of underperforming products - The Group's revenue in H1 2025 was flat compared to H1 2024, at approximately **RMB 144.4 million**[67](index=67&type=chunk) - Cooking wine product revenue increased by **4.0%** to **RMB 95.9 million**, primarily due to new product launches, optimized product mix, and increased promotional efforts[67](index=67&type=chunk) - Revenue from soy sauce, rice vinegar, and other products decreased by **6.9%** to **RMB 48.5 million**, mainly due to product mix adjustments and reduced production of underperforming products[68](index=68&type=chunk) [Cost of Sales](index=27&type=section&id=Cost%20of%20Sales) The Group's cost of sales increased by 5.3%, primarily due to an increased sales proportion of mid-range products with relatively lower gross profit margins - Cost of sales increased by **5.3%** to **RMB 102.4 million**, primarily due to an increased sales proportion of mid-range products with relatively lower gross profit margins[69](index=69&type=chunk) [Gross Profit and Gross Profit Margin](index=28&type=section&id=Gross%20Profit%20and%20Gross%20Profit%20Margin) Gross profit decreased by 10.7% to RMB 42.1 million, and gross profit margin fell from 32.7% to 29.1%; this decline was mainly due to market competition, increased promotional efforts, and a shift in product mix towards lower-margin mid-range products - Gross profit decreased by **10.7%** to **RMB 42.1 million**, with gross profit margin falling from **32.7%** to **29.1%**[70](index=70&type=chunk) - The decline in gross profit margin was primarily attributable to market competition, increased promotional efforts, and a shift in product mix, leading to an increased sales proportion of lower-margin mid-range products[70](index=70&type=chunk) [Other Income and Gains](index=28&type=section&id=Other%20Income%20and%20Gains) Other income and gains significantly decreased by 78.6% to RMB 0.3 million, primarily due to a reduction in other interest income - Other income and gains decreased by **78.6%** to **RMB 0.3 million**, primarily due to a reduction in other interest income[71](index=71&type=chunk) [Selling and Distribution Expenses](index=28&type=section&id=Selling%20and%20Distribution%20Expenses) Selling and distribution expenses increased by 1.4% to RMB 44.8 million, with its percentage of revenue rising from 30.6% to 31.0%, mainly due to increased promotional expenses for existing products and new product development - Selling and distribution expenses increased by **1.4%** to **RMB 44.8 million**, with its percentage of revenue rising from **30.6%** to **31.0%**[72](index=72&type=chunk) - The increase was primarily due to intensified promotional efforts for existing products and increased promotional expenses for new products suitable for online channels[72](index=72&type=chunk) [Administrative Expenses](index=28&type=section&id=Administrative%20Expenses) Administrative expenses decreased by 34.0% to RMB 12.6 million, mainly due to a reduction in service and consulting fees outside of sales and production - Administrative expenses decreased by **34.0%** to **RMB 12.6 million**, primarily due to a reduction in service and consulting fees[73](index=73&type=chunk) [Finance Costs](index=29&type=section&id=Finance%20Costs) Finance costs decreased by 1.3% to RMB 99.0 million, primarily attributable to a decrease in interest rates on new borrowings - Finance costs decreased by **1.3%** to **RMB 99.0 million**, primarily attributable to a decrease in interest rates on new borrowings[74](index=74&type=chunk) [Loss Before Income Tax](index=29&type=section&id=Loss%20Before%20Income%20Tax) Loss before income tax increased by 1.6% to RMB 251.7 million, primarily due to the combined impact of flat revenue, decreased gross profit, and changes in expenses - Loss before income tax increased by **1.6%** to **RMB 251.7 million**[75](index=75&type=chunk) [Income Tax Expense](index=29&type=section&id=Income%20Tax%20Expense) Income tax expense for the current period was zero, consistent with the prior year, mainly due to the Group's continuous tax losses - Income tax expense was zero, primarily attributable to the Group's continuous losses[76](index=76&type=chunk) [Loss Per Share Attributable to Owners of the Company](index=29&type=section&id=Loss%20Per%20Share%20Attributable%20to%20Owners%20of%20the%20Company) Basic loss per share remained at RMB 0.43, consistent with the prior year, reflecting the change in loss for the period - Basic loss per share remained at **RMB 0.43**[77](index=77&type=chunk) [Net Loss Margin](index=29&type=section&id=Net%20Loss%20Margin) Net loss margin increased by 1.6% to 174.3%, primarily due to an expanded loss resulting from a decrease in gross profit margin - Net loss margin increased by **1.6%** to **174.3%**, primarily due to a decrease in gross profit margin[78](index=78&type=chunk) [Financial and Liquidity Position](index=30&type=section&id=Financial%20and%20Liquidity%20Position) This section analyzes the Group's financial and liquidity position, including prepayments, trade receivables, inventories, borrowings, foreign exchange risk, cash flow, and capital commitments; the company faces liquidity pressure with increased and partially overdue borrowings, but management is actively seeking financing channels and implementing inventory management strategies [Prepayments, Deposits and Other Receivables](index=30&type=section&id=Prepayments%2C%20Deposits%20and%20Other%20Receivables) As of June 30, 2025, the total current portion of prepayments, deposits, and other receivables was RMB 26,225 thousand, a slight increase from RMB 25,636 thousand as of December 31, 2024 Prepayments, Deposits and Other Receivables (Current Portion) | Item | June 30, 2025 (RMB thousands) | December 31, 2024 (RMB thousands) | | :--- | :--- | :--- | | Prepayments for fixed assets | 2,455 | 1,993 | | Prepayments for purchase of seasonings | 588 | 175 | | Other prepayments | 2,053 | 2,076 | | Deposits and other receivables | 23,561 | 23,408 | | **Total** | **28,218** | **28,091** | | Less: Portion classified as non-current assets | (2,455) | (1,993) | | **Current portion** | **26,225** | **25,636** | [Trade Receivables](index=30&type=section&id=Trade%20Receivables) Trade receivables turnover days increased from 33 days at the end of 2024 to 34 days in H1 2025, primarily influenced by overall market volatility - Trade receivables turnover days increased from **33 days** for the year ended December 31, 2024, to **34 days** for the six months ended June 30, 2025[80](index=80&type=chunk) - The increase in turnover days was primarily influenced by overall market volatility[80](index=80&type=chunk) [Inventories](index=30&type=section&id=Inventories) Total inventories decreased from RMB 586.1 million at the end of 2024 to RMB 564.4 million in H1 2025, mainly due to increased sales of mid-range products, higher usage of work in progress, increased sales of finished goods, and impairment losses recognized on some inventories; the company implements strict inventory monitoring and management strategies to ensure products are sold within their shelf life - Inventories decreased from **RMB 586.1 million** to **RMB 564.4 million**, primarily due to increased sales of mid-range products, higher usage of work in progress, increased sales of finished goods, and impairment losses recognized on some inventories[81](index=81&type=chunk) - The company regularly monitors distributor inventory levels, with sales representatives compiling monthly inventory statistics and regularly visiting warehouses to ensure optimal inventory levels and assist distributors with market promotion to reduce excess inventory[82](index=82&type=chunk) [Borrowings](index=31&type=section&id=Borrowings) As of June 30, 2025, the Group's total borrowings were approximately RMB 3,570.9 million, an increase from RMB 3,311.3 million at the end of 2024; primary liquidity sources are cash from operations and bank borrowings, mainly used for working capital and capacity expansion, with no current hedging of interest rate risk - The Group's total borrowings were approximately **RMB 3,570.9 million**, an increase from **RMB 3,311.3 million** at the end of 2024[83](index=83&type=chunk) - Primary liquidity sources are cash from operations and bank and other borrowings, mainly used for working capital and capacity expansion[83](index=83&type=chunk) - The Group does not use any financial instruments to hedge interest rate risk[83](index=83&type=chunk) [Foreign Exchange Risk](index=31&type=section&id=Foreign%20Exchange%20Risk) The Group primarily operates in China, with most revenue and expenses denominated in RMB; currently, there is no foreign currency hedging policy, but management monitors and considers hedging when necessary - The Group's primary business is in China, with most revenue and expenses denominated in RMB, and currently has no foreign currency hedging policy[84](index=84&type=chunk) [Liquidity and Financial Resources](index=31&type=section&id=Liquidity%20and%20Financial%20Resources) As of June 30, 2025, cash and cash equivalents were approximately RMB 5.8 million, and interest-bearing bank and other borrowings totaled RMB 3,570.9 million; the company expects cash flow to be sufficient for ongoing operational needs and plans to broaden financing channels to improve its capital structure - As of June 30, 2025, cash and cash equivalents were approximately **RMB 5.8 million**, and interest-bearing bank and other borrowings totaled **RMB 3,570.9 million**[85](index=85&type=chunk) - The company expects cash flow to be sufficient to meet ongoing operational needs and has decided to further broaden financing channels to improve its capital structure[86](index=86&type=chunk) [Capital Commitments](index=32&type=section&id=Capital%20Commitments) As of June 30, 2025, capital commitments were approximately RMB 12.4 million, an increase from RMB 6.2 million at the end of 2024, primarily for payments related to equipment and construction in progress - Capital commitments were approximately **RMB 12.4 million**, an increase from **RMB 6.2 million** at the end of 2024, primarily for payments related to equipment and construction in progress[87](index=87&type=chunk) [Contingent Liabilities](index=32&type=section&id=Contingent%20Liabilities) As of June 30, 2025, the Group had no significant contingent liabilities - The Group had no significant contingent liabilities[88](index=88&type=chunk) [Pledge of Assets](index=32&type=section&id=Pledge%20of%20Assets) The Group pledged certain assets to lenders as security for bank and other borrowings, as detailed in Note 18 to the interim financial information; the Group has not entered into any off-balance sheet guarantees or other commitments - The Group pledged certain assets to lenders as security for bank and other borrowings obtained by the Group[89](index=89&type=chunk) - The Group has not entered into any off-balance sheet guarantees or other commitments[89](index=89&type=chunk) [Future Outlook](index=32&type=section&id=Future%20Outlook) Looking ahead to H2 2025, the Chinese economy is expected to continue its stable and positive trend, with the government focusing on boosting consumption; while the seasoning industry faces challenges, healthy, safe, nutritious, and convenient products will find new opportunities; the Group will remain consumer-centric, consolidating its leading position in the cooking wine market through product innovation, technological upgrades, diversified product structure, and market expansion, striving to become a trusted seasoning knowledge consultant for consumers and achieve sustainable development - In H2 2025, the Chinese economy is expected to maintain a stable and positive trend, with the government focusing on boosting consumption and promoting a shift towards high-quality, diversified consumption structures[90](index=90&type=chunk) - The seasoning industry will increasingly focus on product innovation and upgrading, with nutrition, health, safety, deliciousness, and convenience becoming the main themes for industry innovation and development[91](index=91&type=chunk) - The Group will remain consumer-centric, adhering to a natural, healthy, and nutrition-oriented approach (low-fat, low-sugar, low-salt, organic, additive-free healthy products), and actively promoting the integration of food technology with production practices[92](index=92&type=chunk) - The company will consolidate its leading position in the mid-to-high-end cooking wine and grain-brewed cooking wine markets, and implement a diversified product structure strategy, expanding product line breadth horizontally and deepening product layers vertically[94](index=94&type=chunk) - Continuous efforts will be made to drive innovation and upgrading across the cooking wine industry, from strain research, intelligent and digital brewing, and online quality control to spice process improvements, leveraging technological innovation for sustainable enterprise development[94](index=94&type=chunk) [Other Information](index=34&type=section&id=Other%20Information) This section covers other important information, including significant events after the reporting period, employee and remuneration policies, major investments, acquisitions and disposals of subsidiaries, dealings in listed securities, corporate governance, interim dividends, and review of financial information; the company maintains stability or compliance in these areas [Significant Events After Reporting Period](index=34&type=section&id=Significant%20Events%20After%20Reporting%20Period) As of June 30, 2025, neither the Company nor the Group has undertaken any significant post-reporting period events - Neither the Company nor the Group has undertaken any significant post-reporting period events[97](index=97&type=chunk) [Employees and Remuneration Policies](index=34&type=section&id=Employees%20and%20Remuneration%20Policies) As of June 30, 2025, the Group had 462 full-time employees, a decrease from 509 at the end of 2024; employee costs were RMB 21.1 million, and remuneration policies, bonuses, and training programs remained unchanged from the previous year - As of June 30, 2025, the Group employed **462 full-time employees**, a decrease from **509** at the end of 2024[98](index=98&type=chunk) - Employee costs were **RMB 21.1 million**, and remuneration policies, bonuses, and training programs remained unchanged from the previous year[98](index=98&type=chunk) [Material Investments Held](index=34&type=section&id=Material%20Investments%20Held) As of June 30, 2025, the Group held no material investments - The Group held no material investments[99](index=99&type=chunk) [Material Acquisitions and Disposals of Subsidiaries, Associates and Joint Ventures](index=34&type=section&id=Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%2C%20Associates%20and%20Joint%20Ventures) For the six months ended June 30, 2025, there were no material acquisitions or disposals of subsidiaries, associates, or joint ventures - There were no material acquisitions or disposals of subsidiaries, associates, or joint ventures[100](index=100&type=chunk) [Purchase, Redemption or Sale of the Company's Listed Securities](index=34&type=section&id=Purchase%2C%20Redemption%20or%20Sale%20of%20the%20Company%27s%20Listed%20Securities) For the six months ended June 30, 2025, neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities, and the Company held no treasury shares - Neither the Company nor any of its subsidiaries purchased, redeemed, or sold any of the Company's listed securities[101](index=101&type=chunk) - The Company held no treasury shares[101](index=101&type=chunk) [Corporate Governance](index=35&type=section&id=Corporate%20Governance) The Company has adopted and complied with the Corporate Governance Code in Appendix C1 and the Model Code in Appendix C3 of the HKEX Listing Rules for the six months ended June 30, 2025; the Audit Committee, comprising three directors, is responsible for reviewing financial information, internal controls, and risk management systems - The Company has adopted and complied with the Corporate Governance Code set out in Appendix C1 of the HKEX Listing Rules[102](index=102&type=chunk) - The Company has adopted and complied with the Model Code for Securities Transactions by Directors of Listed Issuers set out in Appendix C3 of the Listing Rules[103](index=103&type=chunk) - The Audit Committee, comprising three directors, is primarily responsible for assisting the Board in providing an independent review of the Group's financial information, financial reporting system, internal control, and risk management systems[104](index=104&type=chunk) [Interim Dividend](index=36&type=section&id=Interim%20Dividend) The Board resolved not to declare any interim dividend for the six months ended June 30, 2025 - The Board resolved not to declare any interim dividend for the six months ended June 30, 2025[105](index=105&type=chunk) [Review of Financial Information](index=36&type=section&id=Review%20of%20Financial%20Information) The Audit Committee has discussed, reviewed, and approved the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, and recommended their adoption by the Board - The Audit Committee has reviewed and approved the Group's unaudited condensed consolidated interim financial statements for the six months ended June 30, 2025, and recommended their adoption by the Board[106](index=106&type=chunk) [Publication of Results Announcement and Interim Report](index=36&type=section&id=Publication%20of%20Results%20Announcement%20and%20Interim%20Report) The results announcement and interim report will be published on the HKEX website and the company's website, respectively - The results announcement will be published on the HKEX website www.hkexnews.hk and the company's website www.hzlaohenghe.com[107](index=107&type=chunk)

[Announcement Information and Financial Summary](index=1&type=section&id=Announcement%20Information%20and%20Financial%20Summary) This section provides essential company and reporting period details, along with a high-level overview of the unaudited financial performance for the six months ended June 30, 2025 [Announcement Statement and Company Information](index=1&type=section&id=Announcement%20Statement%20and%20Company%20Information) This section includes the Hong Kong Stock Exchange's disclaimer, company name, registration details, and stock code, confirming the reporting period for the interim results announcement - The company name is **CARPENTER TAN HOLDINGS LIMITED 譚木匠控股有限公司**, stock code **837**, registered in the Cayman Islands[2](index=2&type=chunk) [Financial Summary](index=1&type=section&id=Financial%20Summary) This section presents an unaudited financial summary for the six months ended June 30, 2025, highlighting year-on-year growth across key metrics including revenue, gross profit, profit before tax, profit for the period, and basic earnings per share Financial Summary for the Six Months Ended June 30 | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | Percentage Change | | :--- | :--- | :--- | :--- | | Revenue | 287,886 | 263,082 | 9.4% | | Cost of sales | (110,089) | (100,837) | 9.2% | | Gross profit | 177,797 | 162,245 | 9.6% | | Gross profit margin | 61.8% | 61.7% | 0.1 percentage point | | Profit before tax | 133,366 | 119,182 | 11.9% | | Profit for the period | 109,046 | 96,288 | 13.2% | | Profit attributable to owners of the Company | 109,046 | 96,288 | 13.2% | | Basic earnings per share (RMB cents) | 43.8 | 38.7 | 13.2% | [Condensed Consolidated Financial Statements](index=2&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section provides the condensed consolidated financial statements, including the statement of profit or loss, statement of profit or loss and other comprehensive income, and statement of financial position, for the reporting period [Condensed Consolidated Statement of Profit or Loss](index=2&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss) This section displays the condensed consolidated statement of profit or loss for the six months ended June 30, 2025, detailing revenue, costs, various expenses, and profit, showing a **13.2%** year-on-year increase in profit for the period Condensed Consolidated Statement of Profit or Loss (For the six months ended June 30) | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Revenue | 287,886 | 263,082 | | Cost of sales | (110,089) | (100,837) | | Gross profit | 177,797 | 162,245 | | Other income | 22,762 | 21,520 | | Selling and distribution expenses | (46,012) | (43,386) | | Administrative expenses | (17,673) | (18,170) | | Other operating expenses | (3,220) | (2,718) | | Operating profit | 133,654 | 119,491 | | Finance costs | (288) | (309) | | Profit before tax | 133,366 | 119,182 | | Income tax expense | (24,320) | (22,894) | | Profit for the period | 109,046 | 96,288 | [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=3&type=section&id=Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) This section presents the condensed consolidated statement of profit or loss and other comprehensive income for the six months ended June 30, 2025, indicating a significant increase in total comprehensive income, primarily driven by positive exchange differences Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Profit for the period | 109,046 | 96,288 | | Exchange differences on translation from functional currency to presentation currency | (3,530) | 5,787 | | Exchange differences arising from translation of overseas operations | 9,358 | (7,692) | | Other comprehensive income/(loss) for the period, net of income tax of nil | 5,828 | (1,905) | | Total comprehensive income for the period | 114,874 | 94,383 | [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=Condensed%20Consolidated%20Statement%20of%20Financial%20Position) This section provides the condensed consolidated statement of financial position as of June 30, 2025, showing growth in total assets less current liabilities and net assets, with notable increases in unsecured fixed bank deposits and cash and cash equivalents Condensed Consolidated Statement of Financial Position (As of June 30, 2025) | Indicator | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | **Non-current assets** | | | | Property, plant and equipment | 139,903 | 132,355 | | Unsecured fixed bank deposits | 306,000 | 218,000 | | **Current assets** | | | | Inventories | 296,535 | 292,498 | | Cash and cash equivalents | 116,530 | 41,714 | | **Current liabilities** | | | | Trade payables | 7,738 | 9,507 | | **Net assets** | 913,201 | 883,959 | [Notes to the Condensed Consolidated Financial Statements](index=5&type=section&id=Notes%20to%20the%20Condensed%20Consolidated%20Financial%20Statements) This section provides detailed notes to the condensed consolidated financial statements, covering general information, accounting policies, judgments, segment reporting, and specific financial line items [1. General Information](index=5&type=section&id=1.%20General%20Information) This section introduces the basic registration information of Carpenter Tan Holdings Limited, including its place of registration, listing exchange, and principal place of business - The company was incorporated in the Cayman Islands on **June 20, 2006**, with shares listed on the Main Board of The Stock Exchange of Hong Kong Limited; its principal place of business is in Wanzhou District, Chongqing, China[10](index=10&type=chunk) [2. Basis of Preparation and Significant Accounting Policies Information](index=5&type=section&id=2.%20Basis%20of%20Preparation%20and%20Significant%20Accounting%20Policies%20Information) This section explains that the interim financial report is prepared in accordance with HKAS 34 and the Listing Rules, noting that the accounting policies adopted are consistent with the previous year's consolidated financial statements, and new revised standards have no significant impact - The interim financial report is prepared in accordance with **Hong Kong Accounting Standard 34** issued by the Hong Kong Institute of Certified Public Accountants and Appendix 16 of the Listing Rules[11](index=11&type=chunk) - The condensed consolidated interim financial statements are prepared on a historical cost basis, except for investment properties measured at fair value and financial assets at fair value through profit or loss[12](index=12&type=chunk) - The application of revised Hong Kong Financial Reporting Standards during the period had no significant impact on the Group's financial position and performance[13](index=13&type=chunk) [3. Accounting Judgements and Estimates Uncertainty](index=6&type=section&id=3.%20Accounting%20Judgements%20and%20Estimates%20Uncertainty) This section states that management made accounting judgments and estimates in preparing the interim financial statements, and the sources of uncertainty for these judgments and estimates are consistent with those described in the previous year's consolidated financial statements - The significant judgments and key sources of estimation uncertainty made by management in preparing the interim financial statements are the same as those described in the previous year's consolidated financial statements[14](index=14&type=chunk) [4. Segment Reporting](index=6&type=section&id=4.%20Segment%20Reporting) This section explains that the company's main business is concentrated in a single segment of manufacturing and selling wooden crafts and accessories, with primary business activities in China, thus no segment and geographical information is presented - Over **90%** of the Group's revenue, results, and assets are derived from the single segment of manufacturing and selling wooden crafts and accessories, hence no segment information is presented[15](index=15&type=chunk) - The Group's revenue and results primarily originate from business activities conducted in China, with overseas business being insignificant, thus no geographical information is provided[15](index=15&type=chunk) - No single external customer transaction equals or exceeds **10%** of the Group's total revenue, so no major customer analysis is provided[16](index=16&type=chunk) [5. Operating Seasonal Factors](index=6&type=section&id=5.%20Operating%20Seasonal%20Factors) This section indicates that the company's sales are subject to seasonal fluctuations, typically higher from March to April and September to December, and lower in July, which is related to peak purchasing before holidays - The Group's sales generally fluctuate due to seasonal factors, with higher sales from March to April and September to December, and lower sales in July[17](index=17&type=chunk) - Seasonal effects are mainly due to increased procurement by franchised stores in preparation for retail peak periods such as Mother's Day, Teacher's Day, National Day, Double Eleven, Christmas, and New Year holidays[17](index=17&type=chunk) [6. Revenue and Other Income](index=7&type=section&id=6.%20Revenue%20and%20Other%20Income) This section analyzes the Group's revenue and other income composition, primarily from goods sales and franchise fees, as well as other income such as government subsidies and VAT refunds - The Group's main business involves designing, manufacturing, and distributing "Carpenter Tan" brand small wooden crafts and accessories; operating a franchised and distribution network primarily in China; and directly selling Group products through retail stores in Hong Kong and China[18](index=18&type=chunk) [6(a) Revenue Details](index=7&type=section&id=6(a)%20Revenue%20Details) For the six months ended June 30, 2025, revenue from goods sales was **RMB 287.593 million**, and franchise fee income was **RMB 293 thousand**, totaling **RMB 287.886 million**, a year-on-year increase of **9.4%** Revenue Details (For the six months ended June 30) | Revenue Category | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Sales of goods | 287,593 | 262,620 | | Franchise fee income | 293 | 462 | | **Total** | **287,886** | **263,082** | [6(b) Other Income Details](index=7&type=section&id=6(b)%20Other%20Income%20Details) For the six months ended June 30, 2025, total other income was **RMB 22.762 million**, a year-on-year increase of **5.8%**, primarily driven by increased government subsidies and China VAT preferential refunds Other Income Details (For the six months ended June 30) | Other Income Category | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Government subsidies | 2,459 | – | | Bank interest income | 1,450 | 5,336 | | Gain on fair value changes | 225 | 25 | | China VAT preferential refunds | 16,412 | 12,298 | | Rental income from investment properties | 1,095 | 2,267 | | Net exchange gain | 15 | 52 | | Others | 1,096 | 1,542 | | **Total** | **22,762** | **21,520** | - In 2025, government subsidies primarily came from the Chongqing Municipal Finance Bureau and Human Resources and Social Security Bureau, aimed at encouraging overseas market promotion and stabilizing employment[19](index=19&type=chunk) [7. Profit Before Tax](index=8&type=section&id=7.%20Profit%20Before%20Tax) This section lists various deductions and inclusions affecting profit before tax, including inventory costs, depreciation, and staff costs, indicating an increase in staff costs Items Affecting Profit Before Tax (For the six months ended June 30) | Item | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | Carrying amount of inventories sold | 111,087 | 101,430 | | Inventories (reversal of write-down)/write-down | (998) | (593) | | Cost of inventories | 110,089 | 100,837 | | Depreciation – property, plant and equipment | 3,665 | 2,515 | | Staff costs (including directors' emoluments) | 54,939 | 51,346 | [8. Income Tax](index=8&type=section&id=8.%20Income%20Tax) This section details the composition and calculation basis of income tax, including China corporate income tax, Hong Kong profits tax, and deferred tax, also mentioning the company's tax incentives Income Tax Expense (For the six months ended June 30) | Tax Category | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | China corporate income tax | 18,678 | 19,135 | | Deferred tax | 5,642 | 3,759 | | **Total** | **24,320** | **22,894** | - Chongqing Carpenter Tan Crafts Co., Ltd. enjoys a preferential corporate income tax rate of **15%**, compared to the statutory rate of **25%**[24](index=24&type=chunk) - Carpenter Tan, a wholly-owned subsidiary, is eligible for a double income tax deduction and VAT refund for employing disabled persons[23](index=23&type=chunk) [9. Earnings Per Share](index=10&type=section&id=9.%20Earnings%20Per%20Share) This section provides details on the calculation of basic earnings per share, which was **RMB 43.8 cents** for the six months ended June 30, 2025, a **13.2%** year-on-year increase, with no diluted earnings as there were no potential ordinary shares issued during the period Basic Earnings Per Share Calculation (For the six months ended June 30) | Indicator | 2025 (RMB '000/cents) | 2024 (RMB '000/cents) | | :--- | :--- | :--- | | Profit used for basic earnings per share | 109,046 | 96,288 | | Weighted average number of ordinary shares issued (thousands) | 248,714 | 248,714 | | Basic earnings per share (RMB cents) | 43.8 | 38.7 | - No diluted earnings per share are presented as there were no potential ordinary shares issued during the period[28](index=28&type=chunk) [10. Fixed Assets](index=10&type=section&id=10.%20Fixed%20Assets) This section discloses the acquisition and disposal of fixed assets and the valuation of investment properties, showing a year-on-year decrease in property and equipment acquisitions and no significant difference between the carrying amount and fair value of investment properties - For the six months ended June 30, 2025, the Group's acquisitions of property and equipment amounted to **RMB 11.236 million**, a year-on-year decrease of approximately **50%** (RMB 22.320 million in the same period of 2024)[29](index=29&type=chunk) - Investment properties were not revalued by independent valuers, and the directors believe there is no significant difference between the carrying amount and the fair value as of December 31, 2024[30](index=30&type=chunk) [11. Trade Receivables](index=11&type=section&id=11.%20Trade%20Receivables) This section provides details on trade receivables and their aging analysis, showing an increase in total trade receivables, with most due within **30 days** Trade Receivables and Aging Analysis (As of June 30, 2025) | Indicator | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Trade receivables from customer contracts | 10,634 | 7,222 | | Less: Provision for credit losses | (94) | (69) | | **Total** | **10,540** | **7,153** | | **Aging Analysis** | | | | 0 to 30 days | 8,551 | 5,617 | | 31 to 60 days | 744 | 799 | | 61 to 90 days | 201 | 315 | | 91 to 180 days | 290 | 52 | | 181 to 365 days | 655 | 163 | | Over 1 year | 99 | 207 | - Customers are generally required to settle orders before product delivery, while reputable customers may be granted credit terms of up to **30 days**[31](index=31&type=chunk) [12. Financial Assets at Fair Value Through Profit or Loss](index=11&type=section&id=12.%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) This section discloses financial assets measured at fair value through profit or loss, primarily principal-protected wealth management products issued by licensed Chinese banks, with a significant year-on-year decrease in amount Financial Assets at Fair Value Through Profit or Loss (As of June 30, 2025) | Indicator | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | Principal-protected wealth management products | 10,000 | 80,791 | - Financial assets primarily consist of principal-protected wealth management products issued by licensed Chinese banks, with expected annual returns between **1.40%** and **2.18%**, all maturing within one year[33](index=33&type=chunk) [13. Trade Payables](index=12&type=section&id=13.%20Trade%20Payables) This section provides an aging analysis of trade payables, showing a decrease in the total amount, with most settled within **30 days** Aging Analysis of Trade Payables (As of June 30, 2025) | Aging | June 30, 2025 (RMB '000) | December 31, 2024 (RMB '000) | | :--- | :--- | :--- | | 0 to 30 days | 6,292 | 5,209 | | 31 to 60 days | 869 | 3,211 | | 61 to 90 days | 49 | 777 | | 91 to 180 days | 333 | 104 | | 181 to 365 days | 81 | 95 | | Over 1 year | 114 | 111 | | **Total** | **7,738** | **9,507** | - Suppliers generally grant credit terms of **30 days**[34](index=34&type=chunk) [14. Dividends](index=12&type=section&id=14.%20Dividends) This section discloses the final dividend for the 2024 fiscal year approved and distributed during the reporting period, and the decision not to declare an interim dividend for the first half of 2025 Dividend Distribution (For the six months ended June 30) | Dividend Type | 2025 (RMB '000) | 2024 (RMB '000) | | :--- | :--- | :--- | | 2024 final dividend (HK 36.63 cents per share) | 85,632 | 87,000 (2023 final dividend) | - The Board of Directors resolved not to declare any interim dividend for the six months ended June 30, 2025[36](index=36&type=chunk) [15. Share Capital](index=13&type=section&id=15.%20Share%20Capital) This section provides information on the company's authorized, issued, and fully paid share capital, showing a stable number of ordinary shares Share Capital (As of June 30, 2025) | Share Capital Type | Number of Shares | Amount (HKD) | Equivalent RMB Amount | | :--- | :--- | :--- | :--- | | Authorized ordinary shares (par value HKD 0.01 per share) | 10,000,000,000 | 100,000,000 | 87,926,000 | | Issued and fully paid ordinary shares | 248,714,000 | 2,487,140 | 2,189,160 | [Management Discussion and Analysis](index=14&type=section&id=Management%20Discussion%20and%20Analysis) This section provides management's review of the company's operations, performance, and strategic initiatives across various business segments for the reporting period [Management Review](index=14&type=section&id=Management%20Review) Management reviewed the operating objectives, key work directions, and measures for the first half of 2025, including market expansion, product R&D, production efficiency, brand building, new factory construction, disabled employment, and market rights protection, noting good growth in retail performance and sales outbound - In the first half of 2025, the Group focused on annual performance targets, market expansion, new intangible cultural heritage product development, craft technology R&D, brand enhancement, new factory construction, disabled employment, and market rights protection[38](index=38&type=chunk) - The domestic market focused on entering high-quality business districts, shopping malls, and retail spaces, promoting a large-store strategy, with plans to open **200-300 square meter** flagship stores in Beijing, Shanghai, or Guangzhou/Shenzhen first[39](index=39&type=chunk) - Overseas market plans for a North American local warehouse were postponed due to trade wars and tax policies, but the company is still exploring platforms like Sam's Club and Costco, and has initiated trial operations for agency authorization in the UK, with new image stores planned for Hong Kong and Singapore in the second half of the year[40](index=40&type=chunk) - Significant progress was made in intelligent polishing comb teeth and body, and automatic milling and forming technology for comb blanks, entering batch trial production; the first phase of the new factory's northern area infrastructure is largely complete, with the logistics distribution center and raw material preparation workshop to relocate in the second half of the year[41](index=41&type=chunk) - Retail performance and sales outbound achieved good growth in the first half of the year, and the Group's governance remained generally effective and healthy[42](index=42&type=chunk) [Offline Business](index=16&type=section&id=Offline%20Business) Offline business achieved **11.9%** POS sales growth in the first half of 2025, with various business indicators reaching historical highs, focusing on channel expansion, store renovation, and service innovation - For the six months ended June 30, 2025, offline business POS sales reached approximately **RMB 437.5 million**, a year-on-year increase of **11.9%**[43](index=43&type=chunk) - Various business indicators, including product sales amount, quantity, number of new stores, renovated stores, active members, and average transaction value, all reached historical highs[43](index=43&type=chunk) [1. Specialty Store Overview](index=16&type=section&id=1.%20Specialty%20Store%20Overview) As of June 30, 2025, Carpenter Tan's total number of global stores reached **1,287**, an increase of **33** from the end of 2024, with shopping mall stores accounting for **72.54%** Specialty Store Quantity Overview (As of June 30, 2025) | Region | June 30, 2025 (Franchised Stores) | June 30, 2025 (Directly Operated Stores) | December 31, 2024 (Franchised Stores) | December 31, 2024 (Directly Operated Stores) | | :--- | :--- | :--- | :--- | :--- | | Mainland China | 1,278 | 1 | 1,245 | 1 | | Hong Kong | – | 3 | – | 3 | | Other Countries and Regions | 5 | – | 5 | – | | **Total** | **1,283** | **4** | **1,250** | **4** | Distribution of Franchised Stores in Mainland China (As of June 30, 2025) | Store Type | June 30, 2025 (Number) | June 30, 2025 (Proportion) | December 31, 2024 (Number) | December 31, 2024 (Proportion) | | :--- | :--- | :--- | :--- | :--- | | Shopping Malls | 927 | 72.5% | 875 | 70.3% | | Street Stores | 223 | 17.4% | 236 | 19.0% | | Department Stores | 57 | 4.5% | 59 | 4.7% | | Supermarkets | 10 | 0.8% | 12 | 1.0% | | Scenic Spots | 44 | 3.4% | 46 | 3.7% | | Transportation Hubs | 10 | 0.8% | 9 | 0.7% | | Hotels | 2 | 0.2% | 2 | 0.2% | | Others | 5 | 0.4% | 6 | 0.4% | | **Total** | **1,278** | **100.0%** | **1,245** | **100.0%** | [2. Channel Development](index=17&type=section&id=2.%20Channel%20Development) The offline team adjusted its store development strategy to parallel new openings and renovations, with **101** new stores, of which **93.07%** are in shopping malls, with an average area of **21.50㎡**; over **100** stores were renovated to rapidly upgrade store image - The number of new stores reached **101**, with shopping mall stores accounting for **93.07%** and an average store area of **21.50㎡**[48](index=48&type=chunk) - Over **100** stores were renovated, rapidly eliminating or upgrading small, poorly located, or outdated stores[48](index=48&type=chunk) [3. Offline Activities](index=17&type=section&id=3.%20Offline%20Activities) The offline team heavily subsidized regional DP point advertising, totaling **RMB 386,000**, and successfully held "Comb Garden" pop-up brand promotion events in Changsha, Kunming, and Guangzhou, with plans to continue in Nanjing, Hangzhou, and Shenyang in the second half of the year - The offline team provided substantial subsidies for regional DP point advertising, totaling **RMB 386,000**, covering multiple cities and regions[49](index=49&type=chunk) - Successfully held "Comb Garden" pop-up brand promotion events in Changsha, Kunming, and Guangzhou, with plans to continue in Nanjing, Hangzhou, and Shenyang in the second half of the year[49](index=49&type=chunk) [4. Member Services](index=18&type=section&id=4.%20Member%20Services) During the reporting period, Carpenter Tan's membership significantly grew, with **171,917** new members, a year-on-year increase of **34.51%**, bringing the total membership to over **1.4 million** - The cumulative number of new members reached **171,917**, a year-on-year increase of **34.51%** (127,813 in the same period of 2024)[50](index=50&type=chunk) - Carpenter Tan's total backend membership has exceeded **1.4 million**[50](index=50&type=chunk) [5. New Product Launches](index=18&type=section&id=5.%20New%20Product%20Launches) During the reporting period, **27** new products were launched, including intangible cultural heritage craft items, Mother's Day new products, summer new products, and meridian combs, with intangible cultural heritage craft products incorporating cloisonné enamel and lacquerware techniques, combining traditional and modern styles - During the reporting period, three new product distributions were conducted, launching **27** new products, including **10** intangible cultural heritage craft items, **5** Mother's Day new products, **11** summer new products, and **1** meridian comb new product[51](index=51&type=chunk) - Among the intangible cultural heritage craft new products, **5** drew inspiration from cloisonné enamel painting art, and **5** utilized lacquerware techniques, embodying both traditional charm and modern style[51](index=51&type=chunk) [6. Store Image Enhancement](index=19&type=section&id=6.%20Store%20Image%20Enhancement) A total of **199** store designs were initiated, with **168** design proposals completed, of which **86%** adopted the Morandi style; the third-generation store image enhancement work is fully completed, and the Hong Kong designer Lee Wing-shing image store is under construction in Beijing Qinghe MixC - A total of **199** store designs were initiated, with **168** design proposals completed, of which **146** adopted the Morandi style, accounting for **86%**[52](index=52&type=chunk) - Carpenter Tan's third-generation store image enhancement work is fully completed, and the Hong Kong designer Lee Wing-shing image store is under construction in Beijing Qinghe MixC[52](index=52&type=chunk) [7. Offline Business Focus for the Second Half of 2025](index=19&type=section&id=7.%20Offline%20Business%20Focus%20for%20the%20Second%20Half%20of%202025) In the second half of the year, offline business will focus on new retail business training, developing store image design and display standards, building a loyal and efficient franchise team, and improving user feedback processing and service quality - Key focus areas for the second half of the year include conducting new retail business training, implementing store image design and display standards, and building a highly loyal and executive franchise team[53](index=53&type=chunk) - Increase feedback channels and establish improvement mechanisms to address higher demands from users regarding product design, quality, repair services, and combing experience[53](index=53&type=chunk) [Online Business](index=20&type=section&id=Online%20Business) Online business achieved sales of **RMB 138 million** in the first half of 2025, a year-on-year increase of **12.65%**, completing **108%** of the semi-annual target, maintaining steady growth despite fierce competition through innovation and expansion - For the six months ended June 30, 2025, online business achieved sales of **RMB 138 million**, a year-on-year increase of **12.65%**, completing **108%** of the semi-annual target[54](index=54&type=chunk) - Online business maintained steady growth in a fiercely competitive environment by continuously innovating sales methods, diversifying product lines, and improving customer experience[54](index=54&type=chunk) [1. New Platforms and Promotion Methods](index=21&type=section&id=1.%20New%20Platforms%20and%20Promotion%20Methods) Online business now covers **8** mainstream e-commerce platforms, signed a JBP strategic cooperation with Tmall, upgraded the "Follow-up Assistant" new module to recall purchased but un-enrolled members, and conducted live streaming sales with Li Ruotong on Xiaohongshu - Online business now operates on **8** platform channels, covering almost all mainstream traditional and new e-commerce platforms[56](index=56&type=chunk) - Signed JBP strategic cooperation and Q2 store live streaming strategic cooperation with Tmall, upgraded the "Follow-up Assistant" new module to recall purchased but un-enrolled members, sending messages to **182,000 people** and generating **RMB 1.89 million** in payments[56](index=56&type=chunk) - Completed **2** live streaming sales sessions with Li Ruotong on Xiaohongshu, achieving a total exposure of **13.3 million**, total views of **1.576 million**, and payments of **RMB 349,000**[56](index=56&type=chunk) [2. Douyin Channel Expansion](index=21&type=section&id=2.%20Douyin%20Channel%20Expansion) Douyin channel promotion focused on brand culture dissemination, enhancing brand influence and user stickiness through content publishing and cross-platform integration, with significant year-on-year growth in Douyin keyword search index and comprehensive index in the first half of the year - In the first half of the year, Douyin keyword search index increased by **80.26%** year-on-year and **48.15%** month-on-month; the comprehensive keyword index increased by **80.65%** year-on-year and **47.76%** month-on-month[57](index=57&type=chunk) - As of June 30, 2025, the total playback volume across all platform accounts was **249.232 million times**, and the Douyin platform account had **298,000 followers**[57](index=57&type=chunk) [3. On-site and Off-site Content Promotion](index=21&type=section&id=3.%20On-site%20and%20Off-site%20Content%20Promotion) On-site and off-site content promotion continued to output brand culture and emotional marketing content, achieving **RMB 3.083 million** in sales through content guidance in the first half of the year, a **31.3%** year-on-year increase, demonstrating good content conversion effectiveness - In the first half of the year, sales achieved through content guidance amounted to **RMB 3.083 million**, a **31.3%** increase compared to **RMB 2.348 million** in the same period last year[58](index=58&type=chunk) - **81** pieces of content were published on Xiaohongshu off-site, with a total exposure of over **5.75 million times**; **328** pieces of influencer content were published on-site content channels, with a total exposure of over **1.269 million times**[58](index=58&type=chunk) [4. Store Service Enhancement](index=22&type=section&id=4.%20Store%20Service%20Enhancement) By introducing Leyan robot software and Shizai Smart RPA robots, Tmall reception service capabilities and refund processing efficiency were improved, reducing manual response time and increasing Wangwang satisfaction - Utilized Leyan robot software to add new Tmall reception service scenarios and auxiliary evaluation scenarios, enhancing reception service capabilities and alleviating consultation pressure[59](index=59&type=chunk) - Utilized Shizai Smart RPA robots to build order return and refund operation scenarios, improving refund processing efficiency[59](index=59&type=chunk) [5. Bestseller Creation](index=22&type=section&id=5.%20Bestseller%20Creation) The online business team focused on creating bestsellers around four products, with "Hair Care Comb - Cui Ping" and "Lacquer Art Comb - Bear with Bamboo" already standing out as the most promising - "Hair Care Comb - Cui Ping" and "Lacquer Art Comb - Bear with Bamboo" have emerged as the most promising bestseller products after promotional efforts in the first half of the year[60](index=60&type=chunk) [6. Tmall Live Streaming](index=22&type=section&id=6.%20Tmall%20Live%20Streaming) Tmall live streaming platform continued to deepen its efforts, conducting **179** live streams, with a **19.4%** year-on-year increase in "grass-roots" driven sales, and member transactions contributing as high as **68%**, achieving excellent industry performance for brand self-broadcasting - A total of **179** live streams were conducted, totaling **1,417.5 hours**, with "grass-roots" driven sales increasing by **19.4%** year-on-year, and penetration rate rising to **10.6%**[61](index=61&type=chunk) - Added **10,600 new followers** and **17,800 new members**, with member transactions making a significant contribution, accounting for as high as **68%**[61](index=61&type=chunk) [7. E-commerce Venue Optimization](index=22&type=section&id=7.%20E-commerce%20Venue%20Optimization) The online business team re-planned the shipping area, adding conveyor belts and automatic express sorters to improve warehousing operational efficiency, reduce manual errors, and optimize logistics services - Re-planned the shipping area, adding conveyor belt equipment and automatic express sorters to improve warehousing operational efficiency and reduce manual operation errors[62](index=62&type=chunk) [8. Online Business Focus for the Second Half of 2025](index=23&type=section&id=8.%20Online%20Business%20Focus%20for%20the%20Second%20Half%20of%202025) In the second half of the year, online business will strengthen platform communication, provide personalized product offerings, integrate online and offline channels, use digital employees to improve customer conversion rates, and explore AI digital human live streaming and continuous optimization of private domain customer operations - Key focus areas for the second half of the year include strengthening communication with various platforms, providing personalized product offerings, integrating online and offline channels, and utilizing "Follow-up Assistant" digital employees to improve customer conversion rates[63](index=63&type=chunk) - Explore introducing Leyan reception robots to Pinduoduo stores to achieve **24-hour** online service and improve store service ratings[63](index=63&type=chunk) - Explore the feasibility of AI digital human live streaming in stores to reduce costs, achieve **24-hour** uninterrupted live streaming, and enhance interactivity[64](index=64&type=chunk) - Continuously optimize private domain customer operations through adding WeChat enterprise friends, member recruitment, user callbacks, and activity notifications to enhance user loyalty[64](index=64&type=chunk) [Overseas Business](index=25&type=section&id=Overseas%20Business) As of June 30, 2025, overseas offline outbound sales increased by **1.02%** year-on-year, and cross-border e-commerce platform sales increased by **2.6%** year-on-year, but Hong Kong directly operated store sales decreased by **7.11%** year-on-year Overseas Business Sales (For the six months ended June 30, 2025) | Business Type | Sales Amount | Year-on-Year Growth/Decrease | | :--- | :--- | :--- | | Overseas offline outbound sales | RMB 1.812 million | Growth 1.02% | | Cross-border e-commerce platform sales | RMB 453,000 | Growth 2.6% | | Hong Kong directly operated store sales | HKD 2.025 million | Decrease 7.11% | [Overseas Key Work Summary](index=25&type=section&id=Overseas%20Key%20Work%20Summary) Overseas business plans to open directly operated stores in Hong Kong and Singapore, with the Hong Kong store featuring a new design image; the original plan to establish overseas warehouses was postponed due to China-US tariffs; participated in the Las Vegas Consumer Goods & Gift Show in the first half of the year, and will participate in the Tokyo Gift Show in the second half; the US official website is being rebuilt and upgraded - Plans to open **1** directly operated store each in Hong Kong and Singapore, with the Hong Kong store adopting a new design image by the Lee Wing-shing team, expected to open by the end of October[66](index=66&type=chunk) - The original plan to establish overseas warehouse sites was postponed due to China-US tariff issues but will continue to be monitored[66](index=66&type=chunk) - Participated in the Las Vegas Consumer Goods & Gift Show in the first half of the year, and will participate in the **100th Tokyo Gift Show** in the second half[66](index=66&type=chunk) - The US official website (tanmujiang.com) is being rebuilt and upgraded, expected to launch in September[66](index=66&type=chunk) [Creative R&D](index=26&type=section&id=Creative%20R%26D) The creative R&D team explores new product design and development directions in structure, materials, and styles, combining market demand and wood inventory, and has completed multiple key projects, including inserted-tooth hair combs, inlaid combs, mixed-material accessories, and co-branded product development - The creative R&D team, based on analysis of existing product systems and in-depth understanding of market demand, explores new product design and development directions in structure, materials, and styles, considering current wood inventory and processing feasibility[67](index=67&type=chunk) [Creative R&D Team Key Projects](index=26&type=section&id=Creative%20R%26D%20Team%20Key%20Projects) Key projects include **2** launched inserted-tooth hair combs, **4** inlaid combs, **4** mixed-material accessories (carbon fiber, ABS, Nanhong agate, Hetian jade combined with wood), and **13** new products co-branded with Hong Kong illustrators - **2** inserted-tooth hair combs, **4** inlaid combs, and **4** mixed-material accessories (carbon fiber, ABS, Nanhong agate, Hetian jade combined with wood) have been launched[68](index=68&type=chunk) - Co-branded with Hong Kong illustrators Siu Kim-ying and Lee Chi-tat to launch "Family Series" and "Time Series" products and packaging designs, totaling **13** new products[68](index=68&type=chunk) - Developed products specifically for overseas market demand, including Southeast Asian regional products and North American beard combs[68](index=68&type=chunk) - Completed sampling and cost estimation for the full packaging system based on the Lee Wing-shing collaboration series packaging as the main line[68](index=68&type=chunk) [Creative R&D Team Future Work Focus](index=27&type=section&id=Creative%20R%26D%20Team%20Future%20Work%20Focus) Future work will focus on enhancing brand image, exploring new materials, processes, and structural applications, improving the efficiency of self-developed projects, and deeply understanding market demand to create best-selling products - Future work will focus on the "brand image enhancement" goal, including new product R&D, packaging system upgrade design, graphic visual promotion materials, and store image support[71](index=71&type=chunk) - Explore the application of new materials, processes, and structures, improve the efficiency of self-developed project design and implementation, and monitor product system sales dynamics to control costs or increase added value[71](index=71&type=chunk) - Deeply understand market demand, incorporating market feedback into the design and R&D process proactively to create best-selling products[71](index=71&type=chunk) [Production Technology](index=27&type=section&id=Production%20Technology) The production organization team effectively ensured market order supply through multi-skilled positions, workshop collaboration, and equipment additions, with **2.8372 million units** delivered in the first half of the year, and a **10.78%** increase in comprehensive production efficiency per capita working hour - In the first half of the year, actual delivery volume was **2.8372 million units**, a year-on-year decrease of approximately **50,000 units**[69](index=69&type=chunk) - Comprehensive production efficiency per capita working hour increased by **10.78%**[69](index=69&type=chunk) [Craft and Equipment Technology Innovation and Improvement](index=27&type=section&id=Craft%20and%20Equipment%20Technology%20Innovation%20and%20Improvement) The "Carpenter Tan Product Type Testing Database" was completed and put into use; the comb blank automated profiling technology project's prototype equipment manufacturing and functional verification are complete; product surface adhesion improvement efforts are in trial production verification; glue-free inserted-tooth comb structure products are optimized and upgraded for production in the second half; raw material precise processing project is completed, improving material yield; and natural plant dye processing technology for wooden combs is under development - The "Carpenter Tan Product Type Testing Database" construction is complete and in use, providing proactive optimization references for design development and marketing[70](index=70&type=chunk) - The prototype equipment manufacturing and functional verification for the comb blank automated profiling technology project are complete, entering formal production phase[72](index=72&type=chunk) - Glue-free inserted-tooth comb structure products have completed optimization and upgrade of comb teeth and glue-free accessory structures, significantly improving the problem of tooth loss, and will be put into production in the second half of the year[72](index=72&type=chunk) - The raw material precise processing project has passed acceptance, with plate surface quality, thickness dimension accuracy, and processing efficiency indicators all met, improving material yield[72](index=72&type=chunk) [Logistics Distribution and After-Sales Repair](index=28&type=section&id=Logistics%20Distribution%20and%20After-Sales%20Repair) The logistics distribution team completed **3.0337 million units** of delivery and shipment in the first half of the year, a year-on-year increase of **9.79%**, while after-sales repair work completed **156,357 units**, a year-on-year increase of **14.66%**, with continuous improvements to the repair quality assurance system - The logistics distribution team completed a total of **3.0337 million units** of production, delivery, and shipment in the first half of the year, a year-on-year increase of **9.79%**[73](index=73&type=chunk) - After-sales repair work completed a total of **156,357 units**, a year-on-year increase of **14.66%**[73](index=73&type=chunk) [After-Sales Repair Quality Assurance Measures](index=29&type=section&id=After-Sales%20Repair%20Quality%20Assurance%20Measures) The repair station continuously improves its repair quality assurance system by starting from the source, strengthening employee skill enhancement, increasing post-repair inspection efforts, updating the "Specialty Store Return, Exchange, and Repair Service" form, and conducting irregular inspections of authorized repair stations - The repair station improves repair quality assurance by carefully inspecting repaired items, strengthening employee skill enhancement, increasing post-repair inspection efforts, and updating the "Specialty Store Return, Exchange, and Repair Service" form[75](index=75&type=chunk) - Irregular inspections are conducted on the repair technology and quality of authorized repair stations, with authorization potentially revoked for those receiving valid complaints for **2** consecutive months[75](index=75&type=chunk) [Brand Building](index=30&type=section&id=Brand%20Building) In brand building, the "Comb Garden" pop-up event and the 9th "Beauty of Combs and Adornments • Carpenter Tan Design Competition" were successfully held, and multiple awards were received, continuously enhancing brand awareness and influence - Successfully held the "Comb Garden" themed pop-up event, based on "nature and emotion," touring Changsha, Kunming, and Guangzhou, receiving widespread acclaim[76](index=76&type=chunk) - The 9th "Beauty of Combs and Adornments • Carpenter Tan Design Competition" concluded successfully, themed "Beauty of Humanity. Design Symbiosis," receiving **528** pieces (sets) of comb and accessory works[77](index=77&type=chunk) ["Comb Garden" Theme Event](index=30&type=section&id=Comb%20Garden%20Theme%20Event) The "Comb Garden" theme event debuted with a new image, creating a warm and healing atmosphere through four core sections: raw wood material display, classic works exhibition, wooden comb making experience, and combing experience, receiving high praise from the audience - The "Comb Garden" event featured four core sections: raw wood material display, classic works exhibition, wooden comb making experience, and combing experience, creating a "garden" atmosphere[76](index=76&type=chunk) - The event specially featured emotional cards and matching packaging themed "family affection, friendship, love, and self-love," imbuing wooden combs with emotional significance[76](index=76&type=chunk) ["Beauty of Combs and Adornments • Carpenter Tan Design Competition"](index=30&type=section&id=Beauty%20of%20Combs%20and%20Adornments%20•%20Carpenter%20Tan%20Design%20Competition) The 9th Design Competition, themed "Beauty of Humanity. Design Symbiosis," attracted wide participation and collaborated with multiple universities to host themed lectures, building a bridge for school-enterprise cooperation - The 9th "Beauty of Combs and Adornments • Carpenter Tan Design Competition," themed "Beauty of Humanity. Design Symbiosis," received **528** pieces (sets) of comb and accessory works[77](index=77&type=chunk) - During the competition, themed lectures were held with Guangzhou Academy of Fine Arts, Zhengzhou University of Light Industry, and Sichuan Fine Arts Institute, building a bridge for school-enterprise cooperation and brand communication with young groups[77](index=77&type=chunk) [Brand Honors](index=31&type=section&id=Brand%20Honors) During the reporting period, Carpenter Tan received multiple brand honors, including an Excellence Award at the "Zijin Award" Cultural and Creative Design Competition and a Silver Award at the China Tourism Commodity Competition, and was recognized as a Chongqing Municipal Excellent Industrial Design Center - Carpenter Tan's "Comb Rhyme Landscape" series of wooden combs received an Excellence Award in the Cultural and Creative Product Comprehensive Competition at the **11th "Zijin Award" Cultural and Creative Design Competition** for its unique cultural connotation and artistic design[79](index=79&type=chunk) - The "Customized Gift Box Chongqing Impression" product won a **Silver Award** at the **2025 China Tourism Commodity Competition**[80](index=80&type=chunk) - Chongqing Carpenter Tan Crafts Co., Ltd.'s Intangible Cultural Heritage Comb and Hairpin Industrial Design Center was recognized as a **Chongqing Municipal Excellent Industrial Design Center**[80](index=80&type=chunk) [Human Resources and Comprehensive Governance](index=31&type=section&id=Human%20Resources%20and%20Comprehensive%20Governance) The company adheres to the governance spirit of "honesty and kindness," upholds core values, establishes fair market expansion mechanisms, insists on brandism, and continuously promotes internal management, market rights protection, disabled employment, and public welfare activities - The Group adheres to the core values of "Honesty, Labor, Happiness" and the moral standards of "Kindness, Humility, Craftsmanship"[82](index=82&type=chunk) - Insists on long-term brandism – no price wars, no discounts, no "lying flat," no active participation in and timely removal, delisting, and investigation of disguised price marketing behaviors[82](index=82&type=chunk) [Company Governance Policy and Core Values](index=31&type=section&id=Company%20Governance%20Policy%20and%20Core%20Values) The Chairman reiterated the "honesty and kindness" requirements for conduct, clarified adherence to the core values of "Honesty, Labor, Happiness" and the moral standards of "Kindness, Humility, Craftsmanship," established fair market expansion mechanisms, and insisted on brandism - The Chairman proposed "honesty and kindness" as requirements for conduct, adhering to the core values of "Honesty, Labor, Happiness" and the moral standards of "Kindness, Humility, Craftsmanship"[82](index=82&type=chunk) - Established a fair market expansion mechanism, breaking down territorialism to achieve sufficient, appropriate, healthy competition and harmonious development[82](index=82&type=chunk) - Insists on long-term brandism, avoiding price wars and discounts, deeply cultivating the brand, and empowering it with culture[82](index=82&type=chunk) [Internal Management and Market Rights Protection](index=32&type=section&id=Internal%20Management%20and%20Market%20Rights%20Protection) Adhering to the governance spirit of "honesty and kindness, inclusive but not indulgent," the company internally investigated and issued **10** notices of criticism in the first half of the year, and imposed penalties and store closures on non-compliant specialty stores; in market rights protection, **23** cases of violations were collected, resulting in **RMB 268,500** in compensation - In the first half of the year, **4** internal investigations resulted in **10** notices of criticism, and non-compliant specialty stores were penalized with deductions from their reputation deposits and store closures[83](index=83&type=chunk) - In the first half of the year, **23** cases of violations were collected, **22** cases had evidence collected and secured, resulting in **RMB 268,500** in compensation[84](index=84&type=chunk) - Continuously encouraged employees to submit reasonable improvement suggestions, receiving **443** in the first half, adopting **151**, and implementing **94**[84](index=84&type=chunk) [Intellectual Property and Safety Production](index=32&type=section&id=Intellectual%20Property%20and%20Safety%20Production) As of June 30, 2025, the company holds **765** valid trademarks and **121** valid patents; the company insists on quarterly safety production meetings and semi-annual fire safety drills, but two production safety accidents occurred in the first half of the year - As of June 30, 2025, the Group holds **765** valid trademarks (including **384** domestic registered trademarks under Carpenter Tan, **128** registered trademarks in Hong Kong, Macau, Taiwan, and overseas; **233** domestic registered trademarks under Mujian Valley, **20** registered trademarks in Hong Kong, Macau, Taiwan, and overseas)[85](index=85&type=chunk) - The Group holds a total of **121** valid patents: **16** invention patents, **55** utility model patents, and **50** design patents[86](index=86&type=chunk) - Two production safety accidents occurred in the first half of the year, involving employees working at height without safety ropes and slipping while retrieving materials, resulting in falls and injuries[86](index=86&type=chunk) [Disabled Employment and Public Welfare Activities](index=33&type=section&id=Disabled%20Employment%20and%20Public%20Welfare%20Activities) The company continues to promote employment for disabled persons, improve accessibility facilities, with a net increase of **10** disabled employees in the first half of the year, totaling **357**, and actively carries out public welfare activities - Continuously committed to promoting and safeguarding employment for disabled persons, and constantly improving rehabilitation venues and facilities for disabled persons[87](index=87&type=chunk) - In the first half of the year, there was a net increase of **10** disabled employees, bringing the current total to **357** disabled employees[87](index=87&type=chunk) - Continuously carried out public welfare activities, including visiting local nursing homes and special education schools[87](index=87&type=chunk) [Financial Review](index=34&type=section&id=Financial%20Review) This section provides a detailed financial review of the company's performance for the reporting period, analyzing key financial indicators and their drivers [1. Revenue](index=34&type=section&id=1.%20Revenue) For the six months ended June 30, 2025, the Group's revenue was **RMB 287.886 million**, a year-on-year increase of **9.4%**, primarily due to market demand recovery, with combined gift boxes being the main income source at **91.7%** Revenue Composition (For the six months ended June 30) | Sales Category | 2025 (RMB '000) | Proportion | 2024 (RMB '000) | Proportion | | :--- | :--- | :--- | :--- | :--- | | Combs | 21,134 | 7.3% | 20,201 | 7.7% | | Mirrors | 230 | 0.1% | 267 | 0.1% | | Combined gift boxes | 264,014 | 91.7% | 240,437 | 91.3% | | Other accessories | 2,215 | 0.8% | 1,715 | 0.7% | | Franchise fee income | 293 | 0.1% | 462 | 0.2% | | **Total** | **287,886** | **100.0%** | **263,082** | **100.0%** | - Revenue increased by **9.4%**, primarily due to the gradual recovery of market demand during the reporting period[89](index=89&type=chunk) [2. Cost of Sales](index=34&type=section&id=2.%20Cost%20of%20Sales) For the six months ended June 30, 2025, the cost of sales was **RMB 110.089 million**, a year-on-year increase of **9.2%**, primarily related to increased sales volume and changes in product mix - Cost of sales was **RMB 110.089 million**, a year-on-year increase of **9.2%** (RMB 100.837 million in the same period of 2024)[90](index=90&type=chunk) - The increase in cost of sales was mainly due to the increase in sales volume and changes in the sales product mix during the reporting period[90](index=90&type=chunk) [3. Gross Profit and Gross Profit Margin](index=34&type=section&id=3.%20Gross%20Profit%20and%20Gross%20Profit%20Margin) For the six months ended June 30, 2025, gross profit was **RMB 177.797 million**, a year-on-year increase of **9.6%**, with the gross profit margin rising from **61.7%** in 2024 to **61.8%** in 2025, mainly due to a shift in sales mix towards higher-margin products - Gross profit was **RMB 177.797 million**, a year-on-year increase of **9.6%** (RMB 162.245 million in the same period of 2024)[91](index=91&type=chunk) - The gross profit margin increased from **61.7%** in 2024 to **61.8%** in 2025, mainly due to a shift in the sales mix towards products with higher gross profit margins[91](index=91&type=chunk) [4. Other Income](index=35&type=section&id=4.%20Other%20Income) For the six months ended June 30, 2025, other income was **RMB 22.762 million**, a year-on-year increase of **5.8%**, primarily driven by increased China VAT preferential refunds and government subsidies - Other income was **RMB 22.762 million**, a year-on-year increase of **5.8%** (RMB 21.520 million in the same period of 2024)[92](index=92&type=chunk) - The increase mainly came from increased China VAT preferential refunds and government subsidies[92](index=92&type=chunk) [5. Selling and Distribution Expenses](index=35&type=section&id=5.%20Selling%20and%20Distribution%20Expenses) For the six months ended June 30, 2025, selling and distribution expenses were **RMB 46.012 million**, a year-on-year increase of **6.1%**, primarily due to increased advertising, transportation, and staff costs - Selling and distribution expenses were **RMB 46.012 million**, a year-on-year increase of **6.1%** (RMB 43.386 million in the same period of 2024)[93](index=93&type=chunk) - The increase mainly resulted from increased advertising expenses, transportation expenses, and staff costs[93](index=93&type=chunk) [6. Administrative Expenses](index=35&type=section&id=6.%20Administrative%20Expenses) For the six months ended June 30, 2025, administrative expenses were **RMB 17.673 million**, a year-on-year decrease of **2.7%**, primarily due to reduced consulting fees - Administrative expenses were **RMB 17.673 million**, a year-on-year decrease of **2.7%** (RMB 18.170 million in the same period of 2024)[94](index=94&type=chunk) - The main decrease came from reduced consulting fees[94](index=94&type=chunk) [7. Operating Profit](index=35&type=section&id=7.%20Operating%20Profit) For the six months ended June 30, 2025, operating profit was **RMB 133.654 million**, a year-on-year increase of **11.9%**, primarily attributable to increased gross profit - Operating profit was **RMB 133.654 million**, a year-on-year increase of **11.9%** (RMB 119.491 million in the same period of 2024)[95](index=95&type=chunk) - The increase in operating profit was mainly attributable to an increase in gross profit of approximately **RMB 15.552 million**[95](index=95&type=chunk) [8. Finance Costs](index=35&type=section&id=8.%20Finance%20Costs) For the six months ended June 30, 2025, finance costs were **RMB 288,000**, a slight year-on-year decrease, primarily arising from the adoption of HKFRS 16, with no bank loan interest expenses during the period - Finance costs were **RMB 288,000** (RMB 309,000 in the same period of 2024), primarily arising from the adoption of HKFRS 16[96](index=96&type=chunk) - The Group had no bank loans during the reporting period and for the six months ended June 30, 2024, thus no interest expenses[96](index=96&type=chunk) [9. Profit Before Tax](index=36&type=section&id=9.%20Profit%20Before%20Tax) For the six months ended June 30, 2025, profit before tax was **RMB 133.366 million**, a year-on-year increase of **11.9%**, primarily driven by increased operating profit - Profit before tax was **RMB 133.366 million**, a year-on-year increase of **11.9%** (RMB 119.182 million in the same period of 2024)[97](index=97&type=chunk) - The increase in profit before tax was mainly attributable to an increase in operating profit of approximately **RMB 14.163 million** during the reporting period[97](index=97&type=chunk) [10. Income Tax Expense](index=36&type=section&id=10.%20Income%20Tax%20Expense) For the six months ended June 30, 2025, income tax expense was **RMB 24.320 million**, a year-on-year increase of **6.2%**, with the effective tax rate decreasing from **19.2%** to **18.2%** - Income tax expense was **RMB 24.320 million**, a year-on-year increase of **6.2%** (RMB 22.894 million in the same period of 2024)[98](index=98&type=chunk) - The effective tax rate decreased by **1.0 percentage point** from **19.2%** in the same period of 2024 to **18.2%**[98](index=98&type=chunk) [11. Profit for the Period](index=36&type=section&id=11.%20Profit%20for%20the%20Period) For the six months ended June 30, 2025, profit for the period was **RMB 109.046 million**, a year-on-year increase of **13.2%**, primarily due to the combined effect of the aforementioned financial factors - Profit for the period was **RMB 109.046 million**, a year-on-year increase of **13.2%** (RMB 96.288 million in the same period of 2024)[99](index=99&type=chunk) [12. Liquidity and Capital Resources](index=36&type=section&id=12.%20Liquidity%20and%20Capital%20Resources) The company primarily meets its funding needs with cash generated from operations, had no bank loans during the period, and the directors believe it has sufficient working capital; as of June 30, 2025, cash and bank balances were **RMB 116.530 million**, a significant increase from the end of 2024 - The Group primarily meets its working capital needs with cash generated from operations and had no bank loans during the period[100](index=100&type=chunk) - As of June 30, 2025, cash and bank balances were **RMB 116.530 million** (RMB 41.714 million as of December 31, 2024), primarily from operating income[100](index=100&type=chunk) [13. Cash Flow](index=37&type=section&id=13.%20Cash%20Flow) During the reporting period, cash and cash equivalents increased by **RMB 74.816 million**, primarily contributed by net cash from operating activities and net cash from investing activities, partially offset by net cash used in financing activities - During the reporting period, the Group's cash and cash equivalents increased by approximately **RMB 74.816 million**[101](index=101&type=chunk) - Net cash generated from operating activities was approximately **RMB 98.627 million**; net cash generated from investing activities was approximately **RMB 56.796 million**; net cash used in financing activities was approximately **RMB 86.435 million**[101](index=101&type=chunk) [14. Capital Structure](index=37&type=section&id=14.%20Capital%20Structure) As of June 30, 2025, the company had no bank loans, rendering the debt-to-equity ratio meaningless, and no pledged assets; capital expenditure significantly decreased year-on-year - As of June 30, 2025, and during the reporting period, the Group had no bank loans, making the calculation of the debt-to-equity ratio meaningless[102](index=102&type=chunk)[103](index=103&type=chunk) - As of June 30, 2025, the Group had no assets pledged to banks[104](index=104&type=chunk) - Capital expenditure was **RMB 11.236 million**, a significant year-on-year decrease (RMB 22.320 million in the same period of 2024)[105](index=105&type=chunk) - The Group's main businesses use RMB and HKD as functional and operating currencies, exposing the Group to foreign exchange risks arising from RMB and HKD, but no significant risks from other exchange rate fluctuations[106](index=106&type=chunk) [15. Contingent Liabilities, Legal and Potential Proceedings](index=38&type=section&id=15.%20Contingent%20Liabilities,%20Legal%20and%20Potential%20Proceedings) The company has a property in Jurong City, Jiangsu Province, for which ownership certificates have not yet been obtained, and a lawsuit has been filed against the developer, who has entered liquidation; however, management assesses that the liquidator is likely to complete the issuance of ownership certificates, with no significant adverse impact - The company has a property in Jurong City, Jiangsu Province, with a carrying amount of approximately **RMB 22.735 million**, for which ownership certificates have not yet been obtained, and a lawsuit has been filed against the developer[107](index=107&type=chunk) - The developer has entered liquidation, but management assesses that the liquidator is likely to continue executing the sale and purchase agreement and complete the issuance of ownership certificates, thus not causing any significant adverse impact on the Group's business operations and financial position[107](index=107&type=chunk) [16. Material Acquisitions and Disposals](index=38&type=section&id=16.%20Material%20Acquisitions%20and%20Disposals) For the six months ended June 30, 2025, the Group did not undertake any material acquisitions or disposals - For the six months ended June 30, 2025, the Group did not undertake any material acquisitions or disposals[108](index=108&type=chunk) [17. Going Concern](index=38&type=section&id=17.%20Going%20Concern) Based on its current financial position and available financing, the directors believe the company has sufficient financial resources to continue as a going concern for the foreseeable future - The Group has sufficient financial resources to continue operating for the foreseeable future, and therefore, the going concern basis has been adopted in the preparation of the financial report[109](index=109&type=chunk) [18. Major Investments Held](index=38&type=section&id=18.%20Major%20Investments%20Held) As of June 30, 2025, investment properties had a carrying amount of approximately **RMB 84.1 million**, were not revalued during the period, and the directors believe there is no significant difference between the carrying amount and fair value, with no purchases or disposals of investment properties - Investment properties had a carrying amount of approximately **RMB 84.1 million**, were not revalued during the period, and the directors believe there is no significant difference between the carrying amount and the fair value estimated by independent qualified professional valuers as of December 31, 2024[110](index=110&type=chunk) - During the reporting period, the Group neither purchased nor disposed of any investment properties[110](index=110&type=chunk) [Future Outlook](index=39&type=section&id=Future%20Outlook) This section outlines the company's strategic priorities and key initiatives planned for the second half of 2025, focusing on human resources, training, and operational enhancements [Human Resources and Training](index=39&type=section&id=Human%20Resources%20and%20Training) As of June 30, 2025, the Group employed **1,007** staff, continued to provide employment opportunities for disabled persons, and enhanced employee skills and sense of belonging through various training forms, with an increase in total remuneration - As of June 30, 2025, the Group employed a total of **1,007** staff in mainland China, Hong Kong, and overseas regions[112](index=112&type=chunk) - Continuously committed to providing employment opportunities for disabled persons and enhancing employee work skills, marketing strategies, and sense of belonging through various training forms[112](index=112&type=chunk) - For the six months ended June 30, 2025, the total remuneration paid by the Group to employees was approximately **RMB 54.939 million** (2024: ap

[Company Overview and Financial Summary](index=1&type=section&id=%E5%85%AC%E5%8F%B8%E6%A6%82%E8%A7%88%E5%8F%8A%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) This section provides an overview of the company's registration, business scope, controlling entity, and a summary of its financial performance for the period [Company Profile](index=7&type=section&id=1.1%20%E5%85%AC%E5%8F%B8%E7%B0%A1%E4%BB%8B) China WTY (Holdings) Company Limited, listed on HKEX, is an investment holding company primarily engaged in cemetery sales, funeral-related services, and maintenance in China, controlled by Ms. Zhao Ying - The company was incorporated in the Cayman Islands on January 25, 2017, and its shares are listed on the Hong Kong Stock Exchange[10](index=10&type=chunk) - The Group's principal businesses include cemetery plot sales, funeral-related services, cemetery maintenance services, and funeral services, primarily concentrated in China[10](index=10&type=chunk) - The ultimate holding company of the Company is Lily Charm Holding Limited, controlled by Ms. Zhao Ying[10](index=10&type=chunk) [Financial Highlights](index=1&type=section&id=1.2%20%E8%B2%A1%E5%8B%99%E6%91%98%E8%A6%81) For the six months ended June 30, 2025, the Group's revenue significantly decreased by 54.2% to RMB11,066 thousand, turning from a profit to a loss of RMB9,389 thousand, with no interim dividend proposed 2025 H1 Key Financial Performance Comparison | Indicator | 2025 H1 (RMB thousands) | 2024 H1 (RMB thousands) | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 11,066 | 24,137 | -54.2% | | (Loss)/Profit attributable to owners of the Company | (9,389) | 7,277 | Shift from profit to loss | - The Board does not recommend the payment of an interim dividend for the period (2024 corresponding period: nil)[4](index=4&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8) This section presents the Group's condensed consolidated financial statements, including the statement of profit or loss, financial position, changes in equity, and cash flows [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=2.1%20%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E6%90%8D%E7%9B%8A%E5%8F%8A%E5%85%B6%E4%BB%96%E5%85%A8%E9%9D%A2%E6%94%B6%E7%9B%8A%E8%A1%A8) For the six months ended June 30, 2025, the Group experienced a significant revenue decline, leading to reduced gross profit, increased other expenses (especially VAT-related fees), and fair value losses on financial assets, resulting in a pre-tax loss and loss attributable to owners Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator (RMB thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Revenue | 11,066 | 24,137 | | Cost of sales and services | (2,910) | (3,567) | | Gross profit | 8,156 | 20,570 | | Other income | 1,315 | 1,920 | | Other expenses | (5,324) | (953) | | Fair value change loss on financial assets at fair value through profit or loss | (2,728) | (200) | | (Loss)/Profit before tax | (9,816) | 10,727 | | (Loss)/Profit for the period attributable to owners of the Company | (9,389) | 7,277 | | Basic (loss)/earnings per share (RMB cents) | (0.9) | 0.7 | [Condensed Consolidated Statement of Financial Position](index=3&type=section&id=2.2%20%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E7%8B%80%E6%B3%81%E8%A1%A8) As of June 30, 2025, the Group's total assets and net assets decreased, with a substantial increase in cemetery assets and a significant reduction in non-current prepayments and other receivables Condensed Consolidated Statement of Financial Position (As of June 30) | Indicator (RMB thousands) | 2025 June 30 | 2024 December 31 | | :--- | :--- | :--- | | **Non-current assets** | | | | Cemetery assets | 82,814 | 12,125 | | Financial assets at fair value through profit or loss | 1,528 | 4,256 | | Prepayments and other receivables (non-current) | 12,756 | 83,968 | | **Current assets** | | | | Bank balances and cash | 158,313 | 171,318 | | **Current liabilities** | | | | Trade and other payables | 10,441 | 13,085 | | **Net assets** | 214,116 | 228,519 | - Cemetery assets significantly increased from **RMB12,125 thousand** as of December 31, 2024, to **RMB82,814 thousand** as of June 30, 2025, primarily due to the grant of land use rights[6](index=6&type=chunk)[33](index=33&type=chunk) - Non-current prepayments and other receivables substantially decreased from **RMB83,968 thousand** to **RMB12,756 thousand**, mainly due to reclassification of prepaid land acquisition costs and land demolition prepayments to cemetery assets[6](index=6&type=chunk)[41](index=41&type=chunk) [Condensed Consolidated Statement of Changes in Equity](index=5&type=section&id=2.3%20%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E6%AC%8A%E7%9B%8A%E8%AE%8A%E5%8B%95%E8%A1%A8) For the six months ended June 30, 2025, total equity attributable to owners of the Company decreased due to the loss for the period and dividends declared Condensed Consolidated Statement of Changes in Equity (For the six months ended June 30) | Indicator (RMB thousands) | 2025 June 30 | 2024 June 30 | | :--- | :--- | :--- | | Equity attributable to owners of the Company at beginning of period | 228,519 (Jan 1, 2025) | 227,794 (Jan 1, 2024) | | (Loss)/Profit and total comprehensive (expense)/income for the period | (9,389) | 7,277 | | Dividends declared | (5,014) | (9,123) | | Equity attributable to owners of the Company at end of period | 214,116 | 225,948 | [Condensed Consolidated Statement of Cash Flows](index=6&type=section&id=2.4%20%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E7%8F%BE%E9%87%91%E6%B5%81%E9%87%8F%E8%A1%A8) For the six months ended June 30, 2025, the Group's operating cash flow shifted from net inflow to net outflow, investment cash outflow significantly decreased, and financing cash outflow was primarily for dividend payments, resulting in a net decrease in cash and cash equivalents Condensed Consolidated Statement of Cash Flows (For the six months ended June 30) | Indicator (RMB thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Net cash (used in)/generated from operating activities | (7,891) | 9,683 | | Net cash generated from/(used in) investing activities | 415 | (29,444) | | Net cash used in financing activities | (5,159) | (275) | | Net decrease in cash and cash equivalents | (12,635) | (20,036) | | Bank balances and cash at end of period | 158,313 | 245,202 | - Net cash flow from operating activities shifted from a **net inflow of RMB9,683 thousand** in the corresponding period of 2024 to a **net outflow of RMB7,891 thousand** in 2025[9](index=9&type=chunk) - Net cash outflow from investing activities significantly decreased, primarily because there was a **RMB30,000 thousand** placement of time deposits in the corresponding period of 2024, which was absent in 2025[9](index=9&type=chunk) - Net cash outflow from financing activities primarily included **dividends paid of RMB5,014 thousand** in 2025[9](index=9&type=chunk) [Notes to the Condensed Consolidated Financial Statements](index=7&type=section&id=%E7%B0%A1%E6%98%8E%E5%90%88%E4%BD%B5%E8%B2%A1%E5%8B%99%E5%A0%B1%E8%A1%A8%E9%99%84%E8%A8%BB) This section provides detailed notes explaining the basis of preparation, accounting policies, and specific items within the condensed consolidated financial statements [General Information](index=7&type=section&id=3.1%20%E4%B8%80%E8%88%AC%E8%B3%87%E6%96%99) This section outlines China WTY (Holdings) Company Limited's registration, listing, principal place of business, core operations, and identifies its ultimate controlling party - The Company was incorporated in the Cayman Islands on January 25, 2017, and its shares are listed on The Stock Exchange of Hong Kong Limited[10](index=10&type=chunk) - The Group's principal business is investment holding, with its subsidiaries primarily engaged in cemetery plot sales, funeral-related services, cemetery maintenance services, and funeral services in China[10](index=10&type=chunk) - The ultimate holding company of the Company is Lily Charm Holding Limited, controlled by Ms. Zhao Ying[10](index=10&type=chunk) [Basis of Preparation](index=7&type=section&id=3.2%20%E7%B7%A8%E8%A3%BD%E5%9F%BA%E6%BA%96) The condensed consolidated financial statements are prepared in accordance with IAS 34 "Interim Financial Reporting" and the disclosure requirements of the HKEX Listing Rules - The condensed consolidated financial statements have been prepared in accordance with International Accounting Standard 34 "Interim Financial Reporting" and the applicable disclosure provisions of the Rules Governing the Listing of Securities on The Stock Exchange of Hong Kong Limited[12](index=12&type=chunk) [Accounting Policies](index=7&type=section&id=3.3%20%E6%9C%83%E8%A8%88%E6%94%BF%E7%AD%96) The condensed consolidated financial statements are prepared on a historical cost basis, except for certain financial instruments measured at fair value, with no significant impact from the first-time application of IAS 21 (Amendment) "Lack of Exchangeability" - The condensed consolidated financial statements are prepared on the historical cost basis, except for certain financial instruments which are measured at fair value[13](index=13&type=chunk) - The Group has first applied IAS 21 (Amendment) "Lack of Exchangeability" in the current interim period, which has no material impact on the Group's financial position and performance[14](index=14&type=chunk) [Revenue and Segment Information](index=8&type=section&id=3.4%20%E6%94%B6%E7%9B%8A%E5%8F%8A%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group's revenue primarily derives from cemetery plot sales, funeral-related services, cemetery maintenance, and funeral services, with total revenue significantly decreasing year-on-year due to reduced cemetery sales and funeral service income, impacting segment performance Revenue by Type of Goods and Services (For the six months ended June 30) | Type of Goods and Services (RMB thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Sale of cemetery plots | 6,256 | 14,008 | | Provision of other funeral-related services | 1,969 | 3,769 | | Provision of funeral parlor services | 2 | 3,534 | | Provision of cemetery maintenance services | 2,839 | 2,826 | | **Total** | **11,066** | **24,137** | - All of the Group's revenue is derived from contracts with customers and generated in China, with substantially all identifiable assets and liabilities located in China[16](index=16&type=chunk) - The Group paid **RMB7,818 thousand** in value-added tax at an applicable rate of 6%, of which **RMB6,227 thousand** offset revenue and **RMB1,591 thousand** offset contract liabilities[17](index=17&type=chunk) Operating Segment Revenue and Results (For the six months ended June 30) | Segment (RMB thousands) | 2025 Revenue | 2025 Results | 2024 Revenue | 2024 Results | | :--- | :--- | :--- | :--- | :--- | | Sale of cemetery plots and provision of other funeral-related services | 8,225 | 3,160 | 17,777 | 15,263 | | Provision of cemetery maintenance services | 2,839 | 1,446 | 2,826 | 2,356 | | Provision of funeral parlor services | 2 | (194) | 3,534 | 2,951 | | **Total** | **11,066** | **4,412** | **24,137** | **20,570** | - Segment results represent gross profit or loss generated by each segment, unallocated for other income, expenses, fair value changes of financial assets, distribution and selling expenses, administrative expenses, and finance costs[21](index=21&type=chunk) [Other Income](index=11&type=section&id=3.5%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) The Group's other income, mainly comprising bank interest income and imputed interest from interest-free prepayments, decreased year-on-year Other Income (For the six months ended June 30) | Item (RMB thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Bank interest income | 709 | 880 | | Imputed interest income from interest-free prepayments and deposits paid | 600 | 1,038 | | Others | 6 | 2 | | **Total** | **1,315** | **1,920** | [Other Expenses](index=12&type=section&id=3.6%20%E5%85%B6%E4%BB%96%E9%96%8B%E6%94%AF) The Group's other expenses significantly increased, primarily due to interest expenses and surcharges related to value-added tax Other Expenses (For the six months ended June 30) | Item (RMB thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Interest expenses and surcharges related to value-added tax | (3,744) | — | | Other expenses | (1,580) | (953) | | **Total** | **(5,324)** | **(953)** | - Interest expenses and surcharges related to value-added tax were a new expense for the period, amounting to **RMB3,744 thousand**[23](index=23&type=chunk) [Other Net Gains and Losses](index=12&type=section&id=3.7%20%E5%85%B6%E4%BB%96%E6%94%B6%E7%9B%8A%E5%8F%8A%E8%99%A7%E6%90%8D%E6%B7%A8%E9%A1%8D) This period's other net gains and losses shifted from a gain to a loss compared to the prior year, primarily due to changes in foreign exchange gains Other Net Gains and Losses (For the six months ended June 30) | Item (RMB thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Foreign exchange gains | (370) | 263 | | Others | — | (39) | | **Total** | **(370)** | **224** | [Loss/Profit Before Tax](index=13&type=section&id=3.8%20%E9%99%A4%E7%A8%85%E5%89%8D%EF%BC%88%E8%99%A7%E6%90%8D%EF%BC%89%E2%88%95%E6%BA%A2%E5%88%A9) The pre-tax loss for the period was primarily influenced by total depreciation and amortization, inventory costs, and staff costs Components of Loss/Profit Before Tax (For the six months ended June 30) | Item (RMB thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Total depreciation and amortization | 1,798 | 1,662 | | Cost of inventories recognized as expense | 1,397 | 1,519 | | Total staff costs | 5,368 | 5,378 | - Amortization of cemetery assets (included in cost of sales and services) increased from **RMB328 thousand** in 2024 to **RMB818 thousand** in 2025[25](index=25&type=chunk) [Income Tax Expense](index=13&type=section&id=3.9%20%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax expense for the period shifted from an expense to a credit, primarily benefiting from a refund of PRC enterprise income tax and the recognition of deferred tax Income Tax Expense (For the six months ended June 30) | Item (RMB thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Current tax: PRC enterprise income tax | 2,055 | 3,147 | | Refund of PRC enterprise income tax | (1,813) | — | | Deferred tax | (669) | 303 | | **Total** | **(427)** | **3,450** | - A refund of **PRC enterprise income tax of RMB1,813 thousand** was received in the current period, with no such item in the corresponding period last year[26](index=26&type=chunk) - Deferred tax shifted from an **expense of RMB303 thousand** in the corresponding period last year to a **credit of RMB669 thousand** in the current period[26](index=26&type=chunk) [Loss/Earnings Per Share](index=14&type=section&id=3.10%20%E6%AF%8F%E8%82%A1%EF%BC%88%E8%99%A7%E6%90%8D%EF%BC%89%E2%88%95%E7%9B%88%E5%88%A9) For the six months ended June 30, 2025, the Company reported a basic loss per share of RMB0.9 cents, compared to earnings per share of RMB0.7 cents in the prior year, with no diluted earnings per share presented due to the absence of potential ordinary shares Loss/Earnings Per Share (For the six months ended June 30) | Indicator | 2025 | 2024 | | :--- | :--- | :--- | | (Loss)/Profit for the purpose of calculating basic (loss)/earnings per share (RMB thousands) | (9,389) | 7,277 | | Number of ordinary shares (shares) | 1,000,000,000 | 1,000,000,000 | | Basic (loss)/earnings per share (RMB cents) | (0.9) | 0.7 | - No potential ordinary shares were outstanding for either period, thus diluted earnings per share are not presented[29](index=29&type=chunk) [Dividends](index=14&type=section&id=3.11%20%E8%82%A1%E6%81%AF) A final dividend totaling HKD5.5 million for the year ended December 31, 2024, was paid during the interim period, and the Board resolved not to declare an interim dividend for the six months ended June 30, 2025 - A final dividend of **HK0.55 cents per share** (equivalent to approximately **RMB0.5 cents**) for the year ended December 31, 2024, totaling **HKD5,500,000**, was paid during the interim period[30](index=30&type=chunk) - The Board resolved not to declare an interim dividend for the six months ended June 30, 2025 (2024 corresponding period: nil)[31](index=31&type=chunk) [Cemetery Assets](index=14&type=section&id=3.12%20%E5%A2%93%E5%9C%92%E8%B3%87%E7%94%A2) As of June 30, 2025, cemetery assets significantly increased, primarily due to the grant of state-owned land use rights for a plot, with related costs reclassified and amortization commencing Composition of Cemetery Assets (RMB thousands) | Item | 2025 June 30 | 2024 December 31 | | :--- | :--- | :--- | | Leasehold land | 74,262 | 3,592 | | Landscaping facilities | 8,226 | 8,199 | | Development costs | 326 | 334 | | **Total** | **82,814** | **12,125** | - The state-owned land use rights for a plot from Langfang Natural Resources and Planning Bureau were granted to the Group in February 2025, with related acquisition costs reclassified to cemetery assets and amortization commencing from March 1, 2025, over a 50-year term[33](index=33&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=15&type=section&id=3.13%20%E6%8C%89%E5%85%AC%E5%B9%B3%E5%80%BC%E8%A8%88%E5%85%A5%E6%90%8D%E7%9B%8A%E7%9A%84%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2) The Group's 10% equity interest in Langfang Anci District Huimin Rural Bank Co., Ltd. is classified as financial assets at fair value through profit or loss, with fair value losses significantly increasing due to the bank's losses, and valuation using market approach with price-to-book ratio and illiquidity discount as key inputs Financial Assets at Fair Value Through Profit or Loss (RMB thousands) | Item | 2025 June 30 | 2024 December 31 | | :--- | :--- | :--- | | Unlisted investments | 1,528 | 4,256 | - Fair value change loss on financial assets at fair value through profit or loss for the period was **RMB2,728 thousand** (2024 corresponding period: **RMB200 thousand**), primarily due to a decrease in the assessed fair value of the 10% equity interest in Langfang Anci District Huimin Rural Bank Co., Ltd. caused by the bank's losses[35](index=35&type=chunk)[56](index=56&type=chunk) Financial Asset Fair Value Valuation Techniques and Key Inputs (June 30, 2025) | Financial Asset | Fair Value (RMB thousands) | Fair Value Hierarchy | Valuation Technique | Key Inputs | | :--- | :--- | :--- | :--- | :--- | | Financial assets at fair value through profit or loss | 1,528 | Level 3 | Market approach: based on target company's financial performance and comparable company multiples | Price-to-book ratio: 0.56; Illiquidity discount: 40% | - A 5% increase/decrease in the price-to-book ratio would result in an increase/decrease of **RMB63 thousand** in the carrying amount of the investment; a 5% increase/decrease in the illiquidity discount would result in a decrease/increase of **RMB42 thousand** in the carrying amount of the investment[38](index=38&type=chunk) [Prepayments and Other Receivables](index=16&type=section&id=3.14%20%E9%A0%90%E4%BB%98%E6%AC%BE%E9%A0%85%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E6%94%B6%E6%AC%BE%E9%A0%85) Non-current prepayments and other receivables significantly decreased due to the reclassification of prepaid land acquisition costs and some land demolition prepayments to cemetery assets, while current prepayments and other receivables slightly increased due to refundable taxes Prepayments and Other Receivables (RMB thousands) | Item | 2025 June 30 | 2024 December 31 | | :--- | :--- | :--- | | **Non-current** | | | | Cemetery project deposits | 9,756 | 9,753 | | Other receivables | 3,000 | 3,000 | | Prepaid land acquisition costs | — | 54,714 | | Land demolition prepayments | — | 16,501 | | **Current** | | | | Prepayments | 253 | 529 | | Land demolition prepayments | 25,997 | 27,193 | | Refundable taxes | 1,813 | — | - Prepaid land acquisition costs of **RMB54,714 thousand** were reclassified to cemetery assets during the period[41](index=41&type=chunk) - **RMB16,501 thousand** of land demolition prepayments were transferred to cemetery assets, with the remaining balance expected to be repaid within one year from the end of the reporting period[41](index=41&type=chunk) - Interest-bearing prepayments of **RMB3,000 thousand** to Langfang Funeral Home are expected to be repaid beyond one year from the end of the reporting period[41](index=41&type=chunk) [Trade and Other Payables](index=17&type=section&id=3.15%20%E8%B2%A9%E6%98%93%E5%8F%8A%E5%85%B6%E4%BB%96%E6%87%89%E4%BB%98%E6%AC%BE%E9%A0%85) As of June 30, 2025, total trade and other payables decreased, with reductions in both trade payables and accrued expenses Trade and Other Payables (RMB thousands) | Item | 2025 June 30 | 2024 December 31 | | :--- | :--- | :--- | | Trade payables | 7,075 | 8,762 | | Other payables and accrued expenses | 3,366 | 4,323 | | **Total** | **10,441** | **13,085** | Ageing Analysis of Trade Payables (RMB thousands) | Ageing | 2025 June 30 | 2024 December 31 | | :--- | :--- | :--- | | Within 1 year | 5,989 | 6,169 | | 1 to 2 years | 1,086 | 2,593 | | **Total** | **7,075** | **8,762** | [Contract Liabilities](index=18&type=section&id=3.16%20%E5%90%88%E7%B4%84%E8%B2%A0%E5%82%B5) Contract liabilities, representing obligations for transferring cemetery plots, maintenance services, and other funeral-related services, slightly decreased in total, with customers typically prepaying 20 years of cemetery maintenance fees Contract Liabilities (RMB thousands) | Item | 2025 June 30 | 2024 December 31 | | :--- | :--- | :--- | | Amount classified as current liabilities | 6,402 | 6,812 | | Amount classified as non-current liabilities | 80,160 | 80,330 | | **Total** | **86,562** | **87,142** | - Contract liabilities represent obligations to transfer cemetery plots, cemetery maintenance services, and other funeral-related services in accordance with revenue recognition policies and the nature of the business[43](index=43&type=chunk) - Customers purchasing funeral services are required to prepay 20 years of maintenance fees for their cemetery plots and gravestones to maintain the cemetery's aesthetics[44](index=44&type=chunk) [Share Capital](index=18&type=section&id=3.17%20%E8%82%A1%E6%9C%AC) The Company's authorized and issued and fully paid share capital remained unchanged, consisting of ordinary shares at USD0.01 each Share Capital Information (RMB thousands) | Item | Number of Shares | Amount | | :--- | :--- | :--- | | Authorized share capital (ordinary shares of USD0.01 each) | 3,000,000,000 | 205,984 | | Issued and fully paid share capital (ordinary shares of USD0.01 each) | 1,000,000,000 | 66,192 | [Related Party Transactions](index=19&type=section&id=3.18%20%E9%97%9C%E8%81%AF%E6%96%B9%E4%BA%A4%E6%98%93) Total key management personnel compensation slightly increased during the period, with a notable rise in discretionary performance bonuses Key Management Personnel Compensation (For the six months ended June 30) | Item (RMB thousands) | 2025 | 2024 | | :--- | :--- | :--- | | Salaries and other benefits | 738 | 1,193 | | Contributions to retirement benefit schemes | 92 | 68 | | Discretionary performance bonuses | 695 | 193 | | **Total** | **1,525** | **1,454** | [Fair Value Measurement of Financial Instruments](index=19&type=section&id=3.19%20%E9%87%91%E8%9E%8D%E5%B7%A5%E5%85%B7%E7%9A%84%E5%85%AC%E5%B9%B3%E5%80%BC%E8%A8%88%E9%87%8F) Except for financial assets at fair value through profit or loss, the Group has no other financial instruments measured at fair value on a recurring basis, and directors believe the carrying amounts of financial assets and liabilities accounted for at amortized cost approximate their fair values - Except for financial assets disclosed in Note 13, the Group has no other financial instruments measured at fair value on a recurring basis[46](index=46&type=chunk) - The directors consider that the carrying amounts of financial assets and financial liabilities accounted for at amortized cost approximate their fair values at each reporting period end[46](index=46&type=chunk) [Business Review and Operating Analysis](index=20&type=section&id=%E6%A5%AD%E5%8B%99%E5%9B%9E%E9%A1%A7%E8%88%87%E7%B6%93%E7%87%9F%E5%88%86%E6%9E%90) This section provides an in-depth review of the Group's core business performance and a detailed analysis of its financial results for the period [Core Business Performance](index=20&type=section&id=4.1%20%E6%A0%B8%E5%BF%83%E6%A5%AD%E5%8B%99%E8%A1%A8%E7%8F%BE) The Group's core businesses include funeral services (cemetery plot sales and related services), funeral parlor services, and cemetery maintenance services, with significant revenue declines in the first two and stable revenue in the latter [Sale of Cemetery Plots and Provision of Other Funeral-Related Services](index=20&type=section&id=4.1.1%20%E5%87%BA%E5%94%AE%E5%A2%93%E5%9C%B0%E5%8F%8A%E6%8F%90%E4%BE%9B%E5%85%B6%E4%BB%96%E6%AE%AA%E8%91%AC%E7%9B%B8%E9%97%9C%E6%9C%8D%E5%8B%99) Funeral services, the largest component of the Group's revenue, saw a significant year-on-year decline due to additional re-evaluated VAT payments and lower average selling prices for cemetery plots - Funeral services are the largest component of the Group's revenue, accounting for **74.3%** of the Group's revenue for the six months ended June 30, 2025 (2024 corresponding period: **73.7%**)[48](index=48&type=chunk) Funeral Services Revenue (RMB thousands) | Item | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Funeral services revenue | 8,225 | 17,777 | - The revenue decrease was primarily due to the payment of additional re-evaluated value-added tax of **RMB6,080 thousand** for funeral service income from prior periods, and a decrease in the average selling price of cemetery plots influenced by macroeconomic conditions and cautious consumer spending[48](index=48&type=chunk) [Provision of Funeral Parlor Services](index=20&type=section&id=4.1.2%20%E6%8F%90%E4%BE%9B%E6%AE%AA%E5%84%80%E6%9C%8D%E5%8B%99) Revenue from funeral parlor services significantly decreased due to adjustments by Langfang Funeral Home in the scope of services provided by the Group within its premises, leading to a temporary decline in demand Funeral Parlor Services Revenue (RMB thousands) | Item | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Funeral parlor services revenue | 2 | 3,534 | - The revenue decrease was due to Langfang Funeral Home adjusting the scope of funeral parlor services provided by the Group within its premises, resulting in a temporary decline in demand for funeral parlor services[49](index=49&type=chunk) [Provision of Cemetery Maintenance Services](index=20&type=section&id=4.1.3%20%E6%8F%90%E4%BE%9B%E5%A2%93%E5%9C%92%E7%B6%AD%E8%AD%B7%E6%9C%8D%E5%8B%99) Revenue from cemetery maintenance services remained stable, representing an integral part of the Group's funeral services Cemetery Maintenance Services Revenue (RMB thousands) | Item | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Cemetery maintenance services revenue | 2,839 | 2,826 | - Customers prepay maintenance fees when purchasing cemetery plots to preserve the cemetery's landscape[50](index=50&type=chunk) [Financial Performance Analysis](index=21&type=section&id=4.2%20%E8%B2%A1%E5%8B%99%E8%A1%A8%E7%8F%BE%E5%88%86%E6%9E%90) The Group's financial performance significantly deteriorated, with substantial declines in revenue and gross profit, a shift from profit to loss, increased other expenses and fair value losses on financial assets, changes in selling and administrative expenses, and a reversal of income tax expense [Revenue](index=21&type=section&id=4.2.1%20%E6%94%B6%E7%9B%8A) The Group's revenue significantly decreased by 54.2% year-on-year, primarily due to additional re-evaluated VAT payments, lower average selling prices for cemetery plots, and reduced demand for funeral parlor services Revenue (RMB millions) | Item | 2025 H1 | 2024 H1 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Revenue | 11.1 | 24.1 | -54.2% | - Revenue decreased by **RMB13.0 million**, mainly due to the payment of additional re-evaluated value-added tax for funeral service income from prior periods, and a decrease in the average selling price of cemetery plots and demand for funeral parlor services[51](index=51&type=chunk) [Cost of Sales and Services](index=21&type=section&id=4.2.2%20%E9%8A%B7%E5%94%AE%E5%8F%8A%E6%9C%8D%E5%8B%99%E6%88%90%E6%9C%AC) Cost of sales and services decreased by 18.4% year-on-year, primarily due to the decline in funeral services and funeral parlor services businesses Cost of Sales and Services (RMB millions) | Item | 2025 H1 | 2024 H1 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Cost of sales and services | 2.9 | 3.6 | -18.4% | [Gross Profit and Gross Margin](index=21&type=section&id=4.2.3%20%E6%AF%9B%E5%88%A9%E5%8F%8A%E6%AF%9B%E5%88%A9%E7%8E%87) The Group's gross profit significantly decreased by 60.4% year-on-year, with the overall gross margin falling to 73.7%; funeral services saw a substantial decline in both gross profit and margin, cemetery maintenance gross margin slightly increased, and funeral parlor services shifted from profit to gross loss Gross Profit and Gross Margin (For the six months ended June 30) | Indicator | 2025 H1 | 2024 H1 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | **Total Gross Profit (RMB millions)** | 8.2 | 20.6 | -60.4% | | **Total Gross Margin** | 73.7% | 85.2% | -11.5 percentage points | | Funeral services gross profit (RMB millions) | 5.9 | 15.3 | -61.1% | | Funeral services gross margin | 72.3% | 85.9% | -13.6 percentage points | | Cemetery maintenance gross profit (RMB millions) | 2.4 | 2.4 | 0% | | Cemetery maintenance gross margin | 84.8% | 83.4% | +1.4 percentage points | | Funeral parlor services gross profit (RMB millions) | (0.2) | 2.9 | Shift from profit to loss | | Funeral parlor services gross margin | Not applicable (loss) | 83.5% | Not applicable | [Other Income](index=21&type=section&id=4.2.4%20%E5%85%B6%E4%BB%96%E6%94%B6%E5%85%A5) The Group's other income decreased year-on-year Other Income (RMB millions) | Item | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Other income | 1.3 | 1.9 | [Other Expenses](index=22&type=section&id=4.2.5%20%E5%85%B6%E4%BB%96%E9%96%8B%E6%94%AF) The Group's other expenses significantly increased year-on-year, primarily due to additional taxes and late payment penalties arising from re-evaluated VAT for prior periods Other Expenses (RMB millions) | Item | 2025 H1 | 2024 H1 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Other expenses | 5.3 | 1.0 | +4.3 | - The increase was primarily due to additional taxes and late payment penalties of **RMB3.7 million** arising from the payment of additional re-evaluated value-added tax for prior periods[55](index=55&type=chunk) [Fair Value Change Loss on Financial Assets at Fair Value Through Profit or Loss](index=22&type=section&id=4.2.6%20%E6%8C%89%E5%85%AC%E5%B9%B3%E5%80%BC%E8%A8%88%E5%85%A5%E6%90%8D%E7%9B%8A%E7%9A%84%E9%87%91%E8%9E%8D%E8%B3%87%E7%94%A2%E4%B9%8B%E5%85%AC%E5%B9%B3%E5%80%BC%E8%AE%8A%E5%8B%95%E8%99%A7%E6%90%8D) Fair value change loss on financial assets significantly increased this period, mainly due to a decrease in the assessed fair value of the equity interest in a rural bank caused by the bank's losses Financial Assets Fair Value Change Loss (RMB millions) | Item | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | Fair value change loss | 2.7 | 0.2 | - The increased loss was due to the decrease in the assessed fair value of the 10% equity interest in Langfang Anci District Huimin Rural Bank Co., Ltd. as a result of the bank incurring losses[56](index=56&type=chunk) [Distribution and Selling Expenses](index=22&type=section&id=4.2.7%20%E5%88%86%E9%8A%B7%E5%8F%8A%E9%8A%B7%E5%94%AE%E9%96%8B%E6%94%AF) Distribution and selling expenses decreased by 9.7% year-on-year, primarily due to reduced staff and sales commissions Distribution and Selling Expenses (RMB millions) | Item | 2025 H1 | 2024 H1 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Distribution and selling expenses | 4.6 | 5.1 | -9.7% | - The decrease was primarily due to reduced staff and sales commissions[57](index=57&type=chunk) [Administrative Expenses](index=22&type=section&id=4.2.8%20%E8%A1%8C%E6%94%BF%E9%96%8B%E6%94%AF) Administrative expenses increased by 9.4% year-on-year, mainly due to the amortization of cemetery assets arising from the completion of land grant acquisition in February 2025 Administrative Expenses (RMB millions) | Item | 2025 H1 | 2024 H1 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Administrative expenses | 6.2 | 5.7 | +9.4% | - The increase was primarily due to the amortization of cemetery assets arising from the completion of land grant acquisition in February 2025[58](index=58&type=chunk) [Income Tax Expense](index=22&type=section&id=4.2.9%20%E6%89%80%E5%BE%97%E7%A8%85%E9%96%8B%E6%94%AF) Income tax for the period shifted from an expense to a credit, mainly due to reduced tax payable from lower gross profit, a refund of overpaid prior period income tax, and the recognition of deferred income tax assets Income Tax Expense (RMB millions) | Item | 2025 H1 | 2024 H1 | Year-on-Year Change | | :--- | :--- | :--- | :--- | | Income tax expense | (0.4) | 3.5 | -3.9 | - The decrease was primarily due to a **RMB1.1 million** reduction in tax payable resulting from lower gross profit from funeral services and funeral parlor services[59](index=59&type=chunk) - A refund of **RMB1.8 million** in overpaid income tax from prior periods is expected due to additional re-evaluated VAT and surcharges[59](index=59&type=chunk) - Income tax expense decreased by **RMB0.7 million** due to the recognition of deferred income tax assets from the decrease in fair value of financial assets held[59](index=59&type=chunk) [Profit and Total Comprehensive Income for the Period](index=23&type=section&id=4.2.10%20%E6%9C%9F%E5%85%A7%E6%BA%A2%E5%88%A9%E5%8F%8A%E5%85%A8%E9%9D%A2%E6%94%B6%E5%85%A5%E7%B8%BD%E9%A1%8D) The Group shifted from a profit in the prior year to a loss for the period, with a significant increase in net loss margin, reflecting a substantial deterioration in overall operating performance Profit and Total Comprehensive Income for the Period (RMB millions) | Item | 2025 H1 | 2024 H1 | | :--- | :--- | :--- | | (Loss)/Profit and total comprehensive (expense)/income for the period | (9.4) | 7.3 | | Net loss margin/Net profit margin | 84.8% (loss) | 30.1% (profit) | [Liquidity and Financial Resources](index=23&type=section&id=%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E5%8F%8A%E8%B2%A1%E5%8B%99%E8%B3%87%E6%BA%90) This section details the Group's overall liquidity position, capital structure, asset pledges, gearing ratio, significant acquisitions, and employee information [Overall Liquidity Position](index=23&type=section&id=5.1%20%E7%B8%BD%E9%AB%94%E6%B5%81%E5%8B%95%E8%B3%87%E9%87%91%E7%8B%80%E6%B3%81) The Group funds its operations primarily through internally generated cash flows, with total equity and assets decreasing, but bank balances and cash remaining at a high level Liquidity Position (RMB millions) | Item | 2025 June 30 | 2024 December 31 | | :--- | :--- | :--- | | Total equity | 214.1 | 228.5 | | Total assets | 316.6 | 334.6 | | Bank balances and cash | 158.3 | 171.3 | - The Group generally funds its operations through internally generated cash flows[61](index=61&type=chunk) [Capital Structure](index=23&type=section&id=5.2%20%E8%B3%87%E6%9C%AC%E6%9E%B6%E6%A7%8B) The Company's capital structure has not undergone any significant changes since its listing date, with share capital consisting solely of ordinary shares - The Company's shares have been listed on the Main Board since December 17, 2019[62](index=62&type=chunk) - The Company's capital structure has not undergone any significant changes since its listing date, with share capital consisting solely of ordinary shares[62](index=62&type=chunk) [Pledge of Assets](index=23&type=section&id=5.3%20%E8%B3%87%E7%94%A2%E6%8A%B5%E6%8A%BC) As of June 30, 2025, and December 31, 2024, the Group had no pledged assets - As of June 30, 2025, and December 31, 2024, the Group had no pledged assets[63](index=63&type=chunk) [Gearing Ratio](index=23&type=section&id=5.4%20%E8%B3%87%E7%94%A2%E8%B2%A0%E5%82%B5%E6%AF%94%E7%8E%87) The Group's gearing ratio slightly increased but remains at a healthy level Gearing Ratio | Item | 2025 June 30 | 2024 December 31 | | :--- | :--- | :--- | | Gearing ratio | 32.4% | 31.7% | - The gearing ratio (total liabilities to total assets) slightly increased but still indicates a sound liquidity position for the Group[64](index=64&type=chunk) [Significant Acquisitions, Disposals, and Material Investments](index=23&type=section&id=5.5%20%E9%87%8D%E5%A4%A7%E6%94%B6%E8%B3%BC%E3%80%81%E5%87%BA%E5%94%AE%E5%8F%8A%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87) During the period, the Group did not undertake any significant acquisitions, disposals, or material investments concerning subsidiaries, associates, or joint ventures - During the period, the Group did not make any significant acquisitions or disposals or material investments concerning subsidiaries, associates, or joint ventures[65](index=65&type=chunk) [Employees and Remuneration Information](index=23&type=section&id=5.6%20%E5%83%B1%E5%93%A1%E5%8F%8A%E8%96%AA%E9%85%AC%E8%B3%87%E6%96%99) The Group's employee count slightly decreased, but it continues to offer competitive remuneration, benefits, and training programs Employee Count | Item | 2025 June 30 | 2024 December 31 | | :--- | :--- | :--- | | Employee count | 66 | 73 | - The Group provides competitive remuneration and benefits to its employees, regularly reviews its remuneration policies, and offers various training programs[66](index=66&type=chunk) [Future Development and Outlook](index=24&type=section&id=%E6%9C%AA%E4%BE%86%E7%99%BC%E5%B1%95%E8%88%87%E5%B1%95%E6%9C%9B) This section outlines the Group's segment information, future plans for significant investments, development and funding plans, and its overall strategic outlook [Segment Information](index=24&type=section&id=6.1%20%E5%88%86%E9%83%A8%E8%B3%87%E6%96%99) The Group operates three primary operating and reportable segments: sale of cemetery plots and provision of other funeral-related services, provision of cemetery maintenance services, and provision of funeral parlor services - The Group has three primary operating and reportable segments: sale of cemetery plots and provision of other funeral-related services, provision of cemetery maintenance services, and provision of funeral parlor services[67](index=67&type=chunk) [Future Plans for Material Investments or Capital Assets](index=24&type=section&id=6.2%20%E9%87%8D%E5%A4%A7%E6%8A%95%E8%B3%87%E6%88%96%E8%B3%87%E6%9C%AC%E8%B3%87%E7%94%A2%E7%9A%84%E6%9C%AA%E4%BE%86%E8%A8%88%E5%8A%83) The Group has no other future plans for material investments or capital assets beyond those disclosed in this announcement - Except for those disclosed in this announcement, the Group has no other future plans for material investments or capital assets[68](index=68&type=chunk) [Development and Funding Plans](index=24&type=section&id=6.3%20%E7%99%BC%E5%B1%95%E5%8F%8A%E8%B3%87%E9%87%91%E5%8B%95%E7%94%A8%E8%A8%88%E5%8A%83) The cemetery joint venture project is a key development, with land acquisition completed and plans to construct operational burial plots in Beijing's new airport resettlement area, with construction expected to start in 2026, funded by shareholder loans and supported by the Group's ample cash flow - The cemetery joint venture project is a key development project for the Group, with the joint venture company already established by Langfang WTY and Xinhangcheng[69](index=69&type=chunk) - Land acquisition was completed in February 2025, involving the acquisition of land use rights for a plot located north of Yongding Road and west of Yongxing River in Langfang City, Hebei Province, China, with a land area of **70,546.27 square meters** and a consideration of **RMB54,713,600**[69](index=69&type=chunk) - The Group plans to construct operational burial plots for sale in the Beijing New Airport (Langfang area) resettlement zone, which involves the development and construction of buildings and ancillary facilities, with an estimated total development cost of approximately **RMB50 million**[70](index=70&type=chunk) - According to the joint venture agreement, the Group is responsible for providing a shareholder loan to the joint venture company for the cemetery joint venture project at an annual interest rate of **6.9%**[70](index=70&type=chunk) - Project construction is expected to commence in 2026, subject to government approvals and recovery of advanced funds[70](index=70&type=chunk) - As of June 30, 2025, the Company had bank balances and cash of **RMB158.3 million**, indicating a sound liquidity position with sufficient funds to support the development of the cemetery joint venture project[71](index=71&type=chunk) [Outlook](index=25&type=section&id=6.4%20%E5%B1%95%E6%9C%9B) The Group plans to strengthen its market position and expand operations by steadily advancing funeral parlor services, deepening its presence in the Beijing-Tianjin-Hebei metropolitan area, offering collective ash storage services, and seeking strategic alliances and acquisition opportunities, with the cemetery joint venture project being key to market consolidation - The Group aims to steadily advance funeral parlor services, improve its integrated service system, further penetrate the funeral service market in the Beijing-Tianjin-Hebei metropolitan area, provide collective ash storage services, and seek strategic alliances and acquisition opportunities, actively developing the cemetery joint venture project[72](index=72&type=chunk) - Due to changes in the policy environment, the planned expansion of funeral parlor services has been limited, but the Group will continue to provide related services at its own premises with its existing professional team[73](index=73&type=chunk) - The Group is committed to transforming from a single funeral service provider to an integrated funeral and interment service provider, continuously launching diversified products covering different consumption levels[73](index=73&type=chunk) - The cemetery joint venture project is one of the Group's key development projects, and management believes it will help consolidate and expand the Group's position in the Langfang and Beijing-Tianjin-Hebei metropolitan area funeral market[73](index=73&type=chunk) [Corporate Governance and Shareholder Information](index=26&type=section&id=%E5%85%AC%E5%8F%B8%E6%B2%BB%E7%90%86%E8%88%87%E8%82%A1%E6%9D%B1%E4%BF%A1%E6%81%AF) This section covers the Group's foreign exchange risk management, contingent liabilities, capital commitments, interests of directors and major shareholders, and corporate governance practices [Foreign Exchange Risk](index=26&type=section&id=7.1%20%E5%A4%96%E5%8C%AF%E9%A2%A8%E9%9A%AA) The Group's operations are primarily denominated in RMB, but some bank deposits are in HKD, exposing it to foreign exchange risk, which the Board actively monitors and considers hedging when necessary - The Group's operations are primarily denominated in RMB, but it is exposed to foreign exchange risk due to certain bank deposits being denominated in HKD[75](index=75&type=chunk) - The Group did not enter into any foreign currency hedging arrangements during the period, and the directors actively monitor foreign exchange risk exposures regularly and will consider hedging when necessary[75](index=75&type=chunk) [Contingent Liabilities and Capital Commitments](index=27&type=section&id=7.2%20%E6%88%96%E7%84%B6%E8%B2%A0%E5%82%B5%E5%8F%8A%E8%B3%87%E6%9C%AC%E6%89%BF%E6%93%94) As of June 30, 2025, the Group had no significant contingent liabilities or capital commitments related to cemetery assets - As of June 30, 2025, the Group had no significant contingent liabilities[76](index=76&type=chunk) - As of June 30, 2025, the Group had no capital commitments in respect of cemetery assets[76](index=76&type=chunk) [Directors' and Chief Executive's Interests](index=27&type=section&id=7.3%20%E8%91%A3%E4%BA%8B%E5%8F%8A%E6%9C%80%E9%AB%98%E8%A1%8C%E6%94%BF%E4%BA%BA%E5%93%A1%E6%AC%8A%E7%9B%8A) As of June 30, 2025, Ms. Zhao Ying, the Company's Chairperson and Non-executive Director, indirectly held 70% of the Company's shares through a discretionary trust, with no other directors or chief executives having disclosable interests Directors' and Chief Executive's Interests in the Company's Shares | Director Name | Capacity/Nature of Interest | Number and Class of Securities | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Ms. Zhao Ying | Founder of discretionary trust, able to influence the trustee's exercise of discretion | 700,000,000 (L) | 70% | - Ms. Zhao Ying, the Company's Chairperson and Non-executive Director, indirectly controls Lily Charm Holding Limited through The Hope Trust (a discretionary trust) and is therefore deemed to have an interest in the **700,000,000 shares** directly held by Taishing International Investment Limited[77](index=77&type=chunk) - As of June 30, 2025, no other directors or chief executives had interests or short positions required to be disclosed under Part XV of the Securities and Futures Ordinance[78](index=78&type=chunk) [Major Shareholders' Interests](index=28&type=section&id=7.4%20%E4%B8%BB%E8%A6%81%E8%82%A1%E6%9D%B1%E6%AC%8A%E7%9B%8A) As of June 30, 2025, Taishing International Investment Limited, Lily Charm Holding Limited, and TMF (Cayman) Ltd. were disclosed as major shareholders, each holding 70% of the Company's shares Major Shareholders' Interests in the Company's Shares | Shareholder Name | Capacity/Nature of Interest | Number and Class of Securities | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Taishing International Investment Limited | Beneficial owner | 700,000,000 (L) | 70% | | Lily Charm Holding Limited | Interest in controlled corporation | 700,000,000 (L) | 70% | | TMF (Cayman) Ltd. | Trustee | 700,000,000 (L) | 70% | - Taishing International Investment Limited directly holds **700,000,000 shares** of the Company[79](index=79&type=chunk) - Lily Charm Holding Limited holds the entire issued share capital of Taishing International Investment Limited, and TMF (Cayman) Ltd. is the trustee of The Hope Trust and holds the entire issued share capital of Lily Charm Holding Limited, thus both are deemed to have the same interest[79](index=79&type=chunk)[83](index=83&type=chunk) [Interests of Other Persons as Shareholders](index=29&type=section&id=7.5%20%E5%85%B6%E4%BB%96%E4%BA%BA%E5%A3%AB%E8%82%A1%E6%9D%B1%E6%AC%8A%E7%9B%8A) As of June 30, 2025, Feifu Trading Limited and its wholly-owned owner, Ms. Xing Junying, held 8.8% of the Company's shares Interests of Other Persons in the Company's Shares | Shareholder Name/Name | Capacity/Nature of Interest | Number and Class of Securities | Percentage of Shareholding | | :--- | :--- | :--- | :--- | | Feifu Trading Limited | Beneficial owner | 87,650,000 (L) | 8.8% | | Ms. Xing Junying | Interest in controlled corporation | 87,650,000 (L) | 8.8% | - Feifu Trading Limited is directly and wholly-owned by Ms. Xing Junying[82](index=82&type=chunk) [Dealings in Listed Securities](index=30&type=section&id=7.6%20%E4%B8%8A%E5%B8%82%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93) Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period and up to the date of this announcement - Neither the Company nor any of its subsidiaries purchased, sold, or redeemed any of the Company's listed securities during the period and up to the date of this announcement[85](index=85&type=chunk) [Competing Interests and Conflicts of Interest](index=30&type=section&id=7.7%20%E7%AB%B6%E7%88%AD%E6%AC%8A%E7%9B%8A%E8%88%87%E5%88%A9%E7%9B%8A%E8%A1%9D%E7%AA%81) The controlling shareholder has entered into a non-competition undertaking with the Company, committing not to engage in any business competing with the Group's core operations, and directors are unaware of any competing interests or conflicts of interest during the period - The controlling shareholder has entered into a non-competition undertaking with the Company, committing not to directly or indirectly conduct, engage in, participate in, or acquire any business that directly or indirectly competes with the Group's core businesses (i.e., funeral services business and planned expansion of funeral parlor services)[86](index=86&type=chunk) - During the period, the directors were not aware of any business engaged in by the directors, controlling shareholders, and their respective associates that constitutes or may constitute competition with the Group's business, or any other conflicts of interest between such persons and the Group[86](index=86&type=chunk) - The controlling shareholder has confirmed compliance with the undertakings contained in the non-competition deed from its effective date up to the date of this announcement[87](index=87&type=chunk) [Directors' Securities Transactions](index=31&type=section&id=7.8%20%E8%91%A3%E4%BA%8B%E8%AD%89%E5%88%B8%E4%BA%A4%E6%98%93) The Company has adopted a code of conduct for directors' securities transactions no less stringent than the Model Code, and all directors confirmed compliance during the period - The Company has adopted a code of conduct regarding directors' dealings in the Company's securities that is no less stringent than the standards set out in the Model Code[88](index=88&type=chunk) - Following specific inquiries with all directors, all directors have confirmed that they complied with the required standards of dealing set out in the Model Code and the Company's adopted code of conduct for directors' securities transactions during the period[88](index=88&type=chunk) [Corporate Governance Practices](index=31&type=section&id=7.9%20%E4%BC%81%E6%A5%AD%E7%AE%A1%E6%B2%BB%E5%B8%B8%E8%A6%8F) The Board believes the Company has consistently applied the principles and complied with all applicable code provisions of the Corporate Governance Code throughout the period - The Board considers that the Company has applied the principles and complied with all applicable code provisions of the Corporate Governance Code as set out in Appendix C1 to the Listing Rules throughout the period[89](index=89&type=chunk) [Changes in Directors' Information](index=31&type=section&id=7.10%20%E8%91%A3%E4%BA%8B%E8%B3%87%E6%96%99%E8%AE%8A%E5%8B%95) There were no changes in directors' information requiring disclosure under Listing Rule 13.51B(1) during the current period and up to the date of this announcement - No information is required to be disclosed under Rule 13.51B(1) of the Listing Rules during the current period and up to the date of this announcement[90](index=90&type=chunk) [Audit Committee](index=31&type=section&id=7.11%20%E5%AF%A9%E6%A0%B8%E5%A7%94%E5%93%A1%E6%9C%83) The Audit Committee reviewed the Group's unaudited condensed consolidated financial statements, deeming them compliant with applicable accounting standards, Listing Rules, and statutory requirements, with sufficient disclosures - The Audit Committee comprises three independent non-executive directors: Dr. Wong Wing Kuen (Chairman), Mr. Cheung Ying Kwok, and Mr. Choi Hon Keung[91](index=91&type=chunk) - The Audit Committee has reviewed the Group's unaudited condensed consolidated financial statements for the period and is of the opinion that they comply with applicable accounting standards, the Listing Rules, and statutory requirements, and that adequate disclosures have been made[91](index=91&type=chunk) [Publication of Interim Results and Interim Report](index=32&type=section&id=7.12%20%E5%88%8A%E7%99%BC%E4%B8%AD%E6%9C%9F%E6%A5%AD%E7%B8%BE%E5%8F%8A%E4%B8%AD%E6%9C%9F%E5%A0%B1%E5%91%8A) This interim results announcement is published on the HKEX and Company websites, with the 2025 annual report to be dispatched to shareholders and posted online in due course, and the announcement date is August 28, 2025, listing the Board members - This interim results announcement is published on the HKEX website (www.hkexnews.hk) and the Company's website (www.chinawty.com)[92](index=92&type=chunk) - The Company's 2025 annual report will be dispatched to shareholders and posted on the Company's and HKEX websites in due course[92](index=92&type=chunk) - The announcement date is August 28, 2025, and the Board members include Ms. Zhao Ying (Chairperson and Non-executive Director), Ms. Li Xingying, Ms. Wang Wei, and Mr. Yang Yun (Executive Directors), and Mr. Cheung Ying Kwok, Dr. Wong Wing Kuen, and Mr. Choi Hon Keung (Independent Non-executive Directors)[93](index=93&type=chunk)[94](index=94&type=chunk)

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不負責， 對其準確性或完整性亦不發表任何聲明，並明確表示，概不對因本公告全部或任 何部份內容而產生或因倚賴該等內容而引致之任何損失承擔任何責任。 | 業績摘要 | | | | | | --- | --- | --- | --- | --- | | | 截至6月30日止六個月 | | | | | | 2025年 | 2024年 | 變動 | | | | （未經審核） | （未經審核） | | | | | 人民幣千元 | 人民幣千元 | 人民幣千元 | % | | 收入 | 17,144 | 30,772 | -13,628 | -44.3 | | 期內虧損 | (7,708) | (16,592) | +8,884 | 不適用 | | | 人民幣分 | 人民幣分 | 人民幣分 | % | | | （未經審核） | （未經審核） | | | | | | （經重列） | | | | 每股基本虧損 | (2.70) | (7.73) | +5.03 | 不適用 | 1 中國金石礦業控股有限公司（「本公司」）董事（「董事」）會（「董事會」）欣然公佈本 公司 ...

香港交易及結算所有限公司及香港聯合交易所有限公司對本公告之內容概不 負 責，對 其 準 確 性 或 完 整 性 亦 不 發 表 任 何 聲 明，並 明 確 表 示 概 不 就 因 本 公 告 全 部 或 任 何 部 份 內 容 而 產 生 或 因 倚 賴 該 等 內 容 而 引 致 之 任 何 損 失 承 擔 任 何 責 任。 BoardWare Intelligence Technology Limited 博維智慧科技有限公司 （於開曼群島註冊成立的有限公司） （股份代號：1204） 截 至2025年6月30日止六個月的 未經審核中期業績公告 財務摘要 本集團收益由2024年財政期間的約318.1百萬港元增加至2025年財政期間的約 321.4百 萬 港 元，較2024年財政期間增加約3.3百萬港元或1.0%。 本集團毛利由2024年財政期間的約65.8百萬港元增加至2025年財政期間的約 69.9百 萬 港 元，較2024年財政期間增加約4.1百萬港元或6.2%。 本集團期內溢利由2024年財政期間的約1.0百萬港元減少至2025年財政期間的 約0.8百 萬 港 元，較2024年財政期間減少約0.2百萬 ...

[Company Information and Report Overview](index=1&type=section&id=I.%20Company%20Information%20and%20Report%20Overview) This section provides fundamental company details and outlines the reporting and comparative periods for the unaudited condensed consolidated results [Company Basic Information](index=1&type=section&id=1.1%20Company%20Basic%20Information) CMBC Capital Holdings Limited (Stock Code: 1141), a company incorporated in Bermuda, announced its unaudited condensed consolidated results for the six months ended June 30, 2025 - Company Name: **CMBC Capital Holdings Limited** (CMBC CAPITAL HOLDINGS LIMITED)[2](index=2&type=chunk) - Stock Code: **1141**[2](index=2&type=chunk) - Place of Incorporation: **Bermuda**[2](index=2&type=chunk) [Reporting and Comparative Periods](index=1&type=section&id=1.2%20Reporting%20and%20Comparative%20Periods) This report covers the unaudited condensed consolidated results for the six months ended June 30, 2025, with comparative figures for the six months ended June 30, 2024 - Reporting Period: **Six months ended June 30, 2025**[3](index=3&type=chunk) - Comparative Period: **Six months ended June 30, 2024**[3](index=3&type=chunk) [Condensed Consolidated Financial Statements](index=2&type=section&id=II.%20Condensed%20Consolidated%20Financial%20Statements) This section presents the condensed consolidated statement of profit or loss and other comprehensive income, and the statement of financial position [Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income](index=2&type=section&id=2.1%20Condensed%20Consolidated%20Statement%20of%20Profit%20or%20Loss%20and%20Other%20Comprehensive%20Income) For the six months ended June 30, 2025, the Group's revenue significantly increased by 56.7% to HK$245.4 million, profit attributable to owners grew by 48.0% to HK$117.9 million, and basic and diluted earnings per share were 10.73 HK cents Key Data from Condensed Consolidated Statement of Profit or Loss and Other Comprehensive Income | Metric | June 30, 2025 (HK$'000) | June 30, 2024 (HK$'000) | | :--- | :--- | :--- | | Revenue | 245,439 | 156,673 | | Net gain from financial assets/liabilities at fair value through profit or loss | 28,915 | 93,994 | | Net loss from financial assets at fair value through other comprehensive income | (1,136) | (11,413) | | Other income | 6,963 | 9,630 | | Other gains/(losses) | 23,815 | (261) | | Impairment losses | (36,127) | (9,698) | | Staff costs | (45,758) | (40,588) | | Depreciation | (10,643) | (11,085) | | Other operating expenses | (29,288) | (26,811) | | Finance costs | (48,368) | (58,174) | | Profit before tax | 133,812 | 102,267 | | Taxation | (15,882) | (22,594) | | Profit for the period attributable to owners of the Company | 117,930 | 79,673 | | Basic and diluted earnings per share | 10.73 HK cents | 7.16 HK cents | - Profit for the period attributable to owners of the Company increased by **48.0%** year-on-year (2025: **HK$117,930 thousand**; 2024: **HK$79,673 thousand**)[5](index=5&type=chunk) - Revenue increased by **56.7%** year-on-year (2025: **HK$245,439 thousand**; 2024: **HK$156,673 thousand**)[5](index=5&type=chunk) [Condensed Consolidated Statement of Financial Position](index=4&type=section&id=2.2%20Condensed%20Consolidated%20Statement%20of%20Financial%20Position) As of June 30, 2025, the Group's total assets increased to HK$4,947.3 million, net current assets were HK$1,509.8 million, and total equity rose to HK$1,556.2 million Key Data from Condensed Consolidated Statement of Financial Position | Metric | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | **Non-current Assets** | | | | Property, plant and equipment | 7,333 | 5,189 | | Right-of-use assets | 27,210 | 36,814 | | Goodwill | 16,391 | 16,391 | | Intangible assets | 960 | 960 | | Other assets | 10,385 | 11,080 | | **Total non-current assets** | **62,279** | **70,434** | | **Current Assets** | | | | Trade receivables | 767,815 | 778,325 | | Prepayments, deposits and other receivables | 70,320 | 9,706 | | Interest receivables | 30,803 | 27,770 | | Loans and advances | 20,278 | 21,810 | | Financial assets measured at amortised cost | 15,831 | 15,644 | | Financial assets at fair value through other comprehensive income | 1,451,137 | 1,539,976 | | Financial assets at fair value through profit or loss | 1,217,835 | 920,961 | | Amount due from an intermediate holding company | 20,435 | – | | Cash held on behalf of clients | 692,271 | 211,321 | | Cash and cash equivalents | 598,287 | 248,550 | | **Total current assets** | **4,885,012** | **3,774,063** | | **Current Liabilities** | | | | Trade payables | 738,707 | 270,481 | | Other payables and accruals | 112,416 | 56,710 | | Amount due to an intermediate holding company | – | 103,232 | | Loan from an intermediate holding company | 1,402,441 | 1,234,965 | | Tax payable | 17,985 | 7,003 | | Financial assets sold under repurchase agreements | 1,081,491 | 734,923 | | Lease liabilities | 22,188 | 22,188 | | **Total current liabilities** | **3,375,228** | **2,429,502** | | **Net current assets** | **1,509,784** | **1,344,561** | | **Net assets** | **1,556,154** | **1,388,770** | | **Total equity** | **1,556,154** | **1,388,770** | - Total assets increased from **HK$3,844.5 million** as of December 31, 2024, to **HK$4,947.3 million** as of June 30, 2025[16](index=16&type=chunk) - Total equity increased from **HK$1,388.8 million** as of December 31, 2024, to **HK$1,556.2 million** as of June 30, 2025[8](index=8&type=chunk) [Notes to the Financial Statements](index=6&type=section&id=III.%20Notes%20to%20the%20Financial%20Statements) This section details the basis of preparation, accounting policy changes, segment information, and specific financial statement line items [Basis of Preparation and Changes in Accounting Policies](index=6&type=section&id=3.1%20Basis%20of%20Preparation%20and%20Changes%20in%20Accounting%20Policies) These interim financial statements are prepared in accordance with HKAS 34 and adopt the same accounting policies as the 2024 annual financial statements, with no material impact from the application of HKAS 21 amendment 'The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability' - The interim financial information is prepared in accordance with **Hong Kong Accounting Standard 34 'Interim Financial Reporting'**[9](index=9&type=chunk) - The amendment to **HKAS 21 'The Effects of Changes in Foreign Exchange Rates – Lack of Exchangeability'** has been applied, but it has no material impact on the interim financial information[10](index=10&type=chunk) [Segment Information](index=7&type=section&id=3.2%20Segment%20Information) The Group's operations are divided into six reportable segments: securities, fixed income direct investment, other investments and financing, asset management, corporate finance and advisory, and others, for resource allocation and performance assessment - The Group has six reportable segments: **securities, fixed income direct investment, other investments and financing, asset management, corporate finance and advisory, and others**[12](index=12&type=chunk) [Segment Revenue Breakdown](index=8&type=section&id=3.2.1%20Segment%20Revenue%20Breakdown) The Group's total revenue for H1 2025 was HK$245.4 million, with significant growth in asset management, underwriting/placement commissions, and financial advisory services, while interest income from debt securities and dividend income decreased Revenue from Contracts with Customers by Service Type | Service Type | June 30, 2025 (HK$'000) | June 30, 2024 (HK$'000) | | :--- | :--- | :--- | | Commission income from brokerage and related services | 4,751 | 5,478 | | Commission income from underwriting, sub-underwriting, placing and sub-placing | 49,380 | 10,442 | | Financial advisory, sponsorship services, arrangement fees and other service income | 36,139 | 23,655 | | Asset management fees, investment advisory service fees and performance fees | 93,305 | 51,498 | | **Total revenue from contracts with customers within the scope of HKFRS 15** | **183,575** | **91,073** | | Interest income from provision of financing and securities margin financing | 11,682 | 3,185 | | Interest income from debt securities investments | 16,615 | 22,801 | | Interest income from investments at fair value through profit or loss | 7,083 | 5,583 | | Dividend income and other investment income | 26,484 | 34,031 | | **Total revenue from other sources** | **50,182** | **62,415** | | **Total revenue** | **245,439** | **156,673** | - Asset management fees, investment advisory service fees, and performance fees increased from **HK$51,498 thousand** to **HK$93,305 thousand**, an increase of approximately **81.2%**[13](index=13&type=chunk) - Commission income from underwriting, sub-underwriting, placing, and sub-placing significantly increased from **HK$10,442 thousand** to **HK$49,380 thousand**, a growth of nearly **373%**[13](index=13&type=chunk) [Segment Revenue and Results](index=10&type=section&id=3.2.2%20Segment%20Revenue%20and%20Results) In H1 2025, the securities, asset management, and corporate finance and advisory segments all achieved significant growth in revenue and results, with asset management contributing the largest profit. Fixed income direct investment and other investments and financing segments experienced revenue fluctuations, with the latter's profit significantly declining Segment Revenue and Results Analysis | Segment | Revenue June 30, 2025 (HK$'000) | Revenue June 30, 2024 (HK$'000) | Results June 30, 2025 (HK$'000) | Results June 30, 2024 (HK$'000) | | :--- | :--- | :--- | :--- | :--- | | Securities | 59,015 | 14,682 | 28,128 | (562) | | Fixed Income Direct Investment | 52,942 | 62,067 | (15,758) | (22,600) | | Other Investments and Financing | 25,019 | 103,761 | 15,969 | 92,990 | | Asset Management | 93,305 | 51,498 | 82,880 | 39,626 | | Corporate Finance and Advisory | 42,937 | 25,783 | 25,779 | 13,623 | | Others | – | – | (3,186) | (20,810) | | **Total** | **273,218** | **239,254** | **133,812** | **102,267** | - The securities segment turned from a loss of **HK$562 thousand** in H1 2024 to a profit of **HK$28,128 thousand** in H1 2025[15](index=15&type=chunk) - Asset management segment profit increased from **HK$39,626 thousand** to **HK$82,880 thousand**, an increase of approximately **109.1%**[15](index=15&type=chunk) [Segment Assets and Liabilities](index=11&type=section&id=3.2.3%20Segment%20Assets%20and%20Liabilities) As of June 30, 2025, the Group's total segment assets increased to HK$4,947.3 million, with securities and fixed income direct investment segments accounting for the largest share. Total segment liabilities increased to HK$3,391.1 million Segment Assets and Liabilities Analysis | Segment | Assets June 30, 2025 (HK$'000) | Assets December 31, 2024 (HK$'000) | Liabilities June 30, 2025 (HK$'000) | Liabilities December 31, 2024 (HK$'000) | | :--- | :--- | :--- | :--- | :--- | | Securities | 1,749,393 | 1,082,353 | 1,293,122 | 725,522 | | Fixed Income Direct Investment | 2,014,144 | 1,721,494 | 1,953,401 | 1,643,011 | | Other Investments and Financing | 870,954 | 830,220 | 83,912 | 68,259 | | Asset Management | 147,498 | 92,038 | 15,937 | 7,128 | | Corporate Finance and Advisory | 60,955 | 33,494 | – | – | | Others | 104,347 | 84,898 | 44,765 | 11,807 | | **Total** | **4,947,291** | **3,844,497** | **3,391,137** | **2,455,727** | - Securities segment assets increased from **HK$1,082,353 thousand** as of December 31, 2024, to **HK$1,749,393 thousand** as of June 30, 2025, an increase of approximately **61.6%**[16](index=16&type=chunk) - Fixed income direct investment segment assets increased from **HK$1,721,494 thousand** to **HK$2,014,144 thousand**, an increase of approximately **17.0%**[16](index=16&type=chunk) [Revenue Details](index=12&type=section&id=3.3%20Revenue%20Details) The Group's total revenue for H1 2025 was HK$245.4 million, primarily driven by asset management fees, underwriting commissions, and financial advisory services, all of which achieved significant growth Revenue Breakdown | Revenue Item | June 30, 2025 (HK$'000) | June 30, 2024 (HK$'000) | | :--- | :--- | :--- | | Commission income from brokerage and related services | 4,751 | 5,478 | | Commission income from underwriting, sub-underwriting, placing and sub-placing | 49,380 | 10,442 | | Interest income from debt securities investments | 16,615 | 22,801 | | Interest income from investments at fair value through profit or loss | 7,083 | 5,583 | | Interest income from provision of financing and securities margin financing | 11,682 | 3,185 | | Dividend income and other investment income | 26,484 | 34,031 | | Financial advisory, sponsorship services, arrangement fees and other service income | 36,139 | 23,655 | | Asset management fees, investment advisory service fees and performance fees | 93,305 | 51,498 | | **Total** | **245,439** | **156,673** | - Asset management fees, investment advisory service fees, and performance fees increased by **81.2%** year-on-year, representing the largest source of revenue[17](index=17&type=chunk) - Commission income from underwriting, sub-underwriting, placing, and sub-placing significantly increased by **373.1%** year-on-year[17](index=17&type=chunk) [Other Income](index=12&type=section&id=3.4%20Other%20Income) The Group's other income for H1 2025 was HK$6.96 million, a decrease from HK$9.63 million in the prior period, primarily due to lower bank interest income Other Income Breakdown | Income Item | June 30, 2025 (HK$'000) | June 30, 2024 (HK$'000) | | :--- | :--- | :--- | | Bank interest income | 1,104 | 3,905 | | Office sharing fee income | 4,440 | 4,440 | | Other income | 1,419 | 1,285 | | **Total** | **6,963** | **9,630** | - Bank interest income decreased from **HK$3,905 thousand** to **HK$1,104 thousand**, a decrease of approximately **71.7%**[18](index=18&type=chunk) [Other Gains/(Losses)](index=12&type=section&id=3.5%20Other%20Gains%2F(Losses)) The Group recorded a net exchange gain of HK$23.82 million in H1 2025, a significant improvement from a net exchange loss of HK$261 thousand in the prior period Other Gains/(Losses) Breakdown | Item | June 30, 2025 (HK$'000) | June 30, 2024 (HK$'000) | | :--- | :--- | :--- | | Net exchange gains/(losses) | 23,815 | (261) | | **Total** | **23,815** | **(261)** | - Net exchange gains turned from a loss of **HK$261 thousand** in H1 2024 to a gain of **HK$23,815 thousand** in H1 2025[19](index=19&type=chunk) [Impairment Losses](index=13&type=section&id=3.6%20Impairment%20Losses) The Group's impairment losses for H1 2025 significantly increased to HK$36.13 million, primarily due to a substantial increase in impairment provisions for financial assets at fair value through other comprehensive income Impairment Loss Provisions Breakdown | Item | June 30, 2025 (HK$'000) | June 30, 2024 (HK$'000) | | :--- | :--- | :--- | | Loans and advances | 3,578 | 134 | | Trade receivables | (209) | 1,387 | | Financial assets at fair value through other comprehensive income | 31,398 | 6,569 | | Interest receivables | 1,370 | 1,588 | | Financial assets held under resale agreements | – | 21 | | Financial assets measured at amortised cost | (10) | (1) | | **Total** | **36,127** | **9,698** | - Impairment loss provisions for financial assets at fair value through other comprehensive income increased from **HK$6,569 thousand** to **HK$31,398 thousand**, an increase of approximately **377.9%**[20](index=20&type=chunk) - Impairment loss provisions for loans and advances significantly increased from **HK$134 thousand** to **HK$3,578 thousand**[20](index=20&type=chunk) [Finance Costs](index=13&type=section&id=3.7%20Finance%20Costs) The Group's finance costs for H1 2025 were HK$48.37 million, a decrease from HK$58.17 million in the prior period, primarily due to reduced interest expenses on repurchase agreements Finance Costs Breakdown | Item | June 30, 2025 (HK$'000) | June 30, 2024 (HK$'000) | | :--- | :--- | :--- | | Loan from an intermediate holding company | 30,265 | 21,604 | | Repurchase agreements | 17,490 | 35,613 | | Lease liabilities | 613 | 957 | | **Total** | **48,368** | **58,174** | - Interest expenses on repurchase agreements decreased from **HK$35,613 thousand** to **HK$17,490 thousand**, a decrease of approximately **50.9%**[21](index=21&type=chunk) - Interest expenses on loans from an intermediate holding company increased from **HK$21,604 thousand** to **HK$30,265 thousand**, an increase of approximately **40.1%**[21](index=21&type=chunk) [Profit Before Tax](index=13&type=section&id=3.8%20Profit%20Before%20Tax) The Group's profit before tax for H1 2025 was HK$133.81 million, a 30.8% increase from HK$102.27 million in the prior period, driven by revenue growth and lower finance costs Profit Before Tax and Depreciation | Item | June 30, 2025 (HK$'000) | June 30, 2024 (HK$'000) | | :--- | :--- | :--- | | Profit before tax | 133,812 | 102,267 | | Depreciation of property, plant and equipment | 1,039 | 1,481 | | Depreciation of right-of-use assets | 9,604 | 9,604 | | **Total depreciation** | **10,643** | **11,085** | - Profit before tax increased by **30.8%** year-on-year[5](index=5&type=chunk) [Taxation](index=14&type=section&id=3.9%20Taxation) The Group's tax expense for H1 2025 was HK$15.88 million, a decrease from HK$22.59 million in the prior period, with Hong Kong profits tax calculated at 16.5% and the temporary mandatory exception for deferred tax accounting for Pillar Two top-up tax applied Taxation Breakdown | Item | June 30, 2025 (HK$'000) | June 30, 2024 (HK$'000) | | :--- | :--- | :--- | | Current – Hong Kong profits tax | (15,716) | (7,216) | | Deferred tax for the period | (166) | (15,378) | | **Total** | **(15,882)** | **(22,594)** | - Hong Kong profits tax is calculated at **16.5%** of the estimated assessable profit[24](index=24&type=chunk) - The Group has applied the temporary mandatory exception for deferred tax accounting for **Pillar Two top-up tax**[25](index=25&type=chunk) [Earnings Per Share](index=14&type=section&id=3.10%20Earnings%20Per%20Share) The Group's basic and diluted earnings per share for H1 2025 were 10.73 HK cents, a significant increase from 7.16 HK cents in the prior period, primarily due to increased profit Earnings Per Share Data | Metric | June 30, 2025 | June 30, 2024 | | :--- | :--- | :--- | | Profit attributable to owners of the Company (HK$'000) | 117,930 | 79,673 | | Weighted average number of ordinary shares (thousand shares) | 1,099,256 | 1,113,120 | | Basic and diluted earnings per share (HK cents) | 10.73 | 7.16 | - Basic and diluted earnings per share increased by approximately **49.9%** year-on-year[27](index=27&type=chunk) - There were no dilutive items during the reporting period[28](index=28&type=chunk) [Dividends](index=15&type=section&id=3.11%20Dividends) The Board does not recommend the payment of an interim dividend for the six months ended June 30, 2025 - No interim dividend is recommended (prior period: nil)[29](index=29&type=chunk) [Loans and Advances](index=15&type=section&id=3.12%20Loans%20and%20Advances) As of June 30, 2025, the carrying amount of loans and advances was HK$20.28 million, with expected credit loss provisions increasing to HK$238.27 million, reflecting increased credit impairment risk Loans and Advances Breakdown | Item | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Loans and advances | 258,546 | 256,500 | | Less: Expected credit loss provisions | (238,268) | (234,690) | | **Total** | **20,278** | **21,810** | - Expected credit loss provisions increased from **HK$234,690 thousand** to **HK$238,268 thousand**[30](index=30&type=chunk) - Impairment losses of approximately **HK$3,578 thousand** were recognized for the six months ended June 30, 2025, a significant increase from **HK$134 thousand** in the prior period[31](index=31&type=chunk) [Trade Receivables](index=16&type=section&id=3.13%20Trade%20Receivables) As of June 30, 2025, the Group's total trade receivables were HK$767.82 million, with margin clients' receivables being the largest component. Impairment loss reversal of HK$209 thousand was recognized for securities trading receivables, while no impairment loss was recognized for other business receivables [Trade Receivables from Securities Trading Business](index=16&type=section&id=3.13.1%20Trade%20Receivables%20from%20Securities%20Trading%20Business) As of June 30, 2025, total trade receivables from securities trading business were HK$796.88 million, with margin clients' receivables at HK$515.06 million. An impairment loss reversal of HK$209 thousand was recognized during the period Trade Receivables from Securities Trading Business Breakdown | Item | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Clearing houses | 254,717 | 306,354 | | Cash clients | 21,963 | 42,358 | | Margin clients | 515,063 | 476,217 | | Brokers | 5,136 | 18,265 | | **Total** | **796,879** | **843,194** | - Receivables from margin clients are repayable on demand, with annual interest rates ranging from **1.5% to 18.3%**[33](index=33&type=chunk) - An impairment loss reversal of approximately **HK$209 thousand** was recognized for the six months ended June 30, 2025[33](index=33&type=chunk) [Trade Receivables from Securities Underwriting, Advisory, Client Referral and Asset Management Services](index=17&type=section&id=3.13.2%20Trade%20Receivables%20from%20Securities%20Underwriting,%20Advisory,%20Client%20Referral%20and%20Asset%20Management%20Services) As of June 30, 2025, total trade receivables from securities underwriting, advisory, client referral, and asset management services were HK$76.27 million, with the largest portion being not yet due. No impairment loss was recognized during the period Aging Analysis of Trade Receivables from Securities Underwriting, Advisory, Client Referral and Asset Management Services | Aging | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Not yet due | 56,267 | 29,937 | | Overdue less than 31 days | 11,557 | 459 | | Overdue 31 to 60 days | 2,281 | 3,995 | | Overdue 61 to 90 days | 468 | 1,820 | | Overdue over 90 days | 5,701 | 4,467 | | **Total** | **76,274** | **40,678** | | Less: Expected credit loss provisions | (2,713) | (2,713) | | **Net** | **73,561** | **37,965** | - No impairment losses were recognized in the condensed consolidated statement of profit or loss and other comprehensive income for the six months ended June 30, 2025 and 2024[34](index=34&type=chunk) [Financial Assets at Fair Value Through Other Comprehensive Income](index=17&type=section&id=3.14%20Financial%20Assets%20at%20Fair%20Value%20Through%20Other%20Comprehensive%20Income) As of June 30, 2025, total financial assets at fair value through other comprehensive income were HK$1,451.14 million, with equity investments being the largest component. Expected credit losses of approximately HK$31.40 million were recognized during the period Financial Assets at Fair Value Through Other Comprehensive Income Breakdown | Item | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Debt investments | 527,113 | 703,534 | | Equity investments | 924,024 | 836,442 | | **Total** | **1,451,137** | **1,539,976** | - Expected credit losses of approximately **HK$31,398 thousand** were recognized for the six months ended June 30, 2025, a significant increase from **HK$6,569 thousand** in the prior period[35](index=35&type=chunk) [Financial Assets at Fair Value Through Profit or Loss](index=18&type=section&id=3.15%20Financial%20Assets%20at%20Fair%20Value%20Through%20Profit%20or%20Loss) As of June 30, 2025, total financial assets at fair value through profit or loss were HK$1,217.84 million, an increase of approximately 32.2% from December 31, 2024, driven by growth in debt investments and unlisted investment funds Financial Assets at Fair Value Through Profit or Loss Breakdown | Item | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Listed equity investments | 40,642 | 118,488 | | Unlisted equity investments | 43,111 | 40,552 | | Debt investments | 390,729 | 70,889 | | Unlisted investment funds | 743,353 | 691,032 | | **Total** | **1,217,835** | **920,961** | - Debt investments significantly increased from **HK$70,889 thousand** to **HK$390,729 thousand**[36](index=36&type=chunk) - Listed equity investments decreased from **HK$118,488 thousand** to **HK$40,642 thousand**[36](index=36&type=chunk) [Trade Payables](index=18&type=section&id=3.16%20Trade%20Payables) As of June 30, 2025, total trade payables were HK$738.71 million, a significant increase of 173.1% from December 31, 2024, primarily due to a substantial rise in amounts payable to cash clients Trade Payables Breakdown | Item | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Cash clients | 530,498 | 99,978 | | Margin clients | 149,410 | 99,401 | | Clearing houses | 2,875 | 603 | | Brokers | 55,924 | 70,499 | | **Total** | **738,707** | **270,481** | - Amounts payable to cash clients significantly increased from **HK$99,978 thousand** to **HK$530,498 thousand**[37](index=37&type=chunk) - Trade payable balances are generally settled within **two trading days** after the transaction date[38](index=38&type=chunk) [Loan from an Intermediate Holding Company](index=19&type=section&id=3.17%20Loan%20from%20an%20Intermediate%20Holding%20Company) As of June 30, 2025, the total loan from intermediate holding company CMBC International was HK$1,402.44 million, a 13.6% increase from December 31, 2024. The loan is unsecured, bears interest at 4.5% per annum, and is repayable within one year Loan from an Intermediate Holding Company | Item | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Loan from an intermediate holding company | 1,402,441 | 1,234,965 | | **Total** | **1,402,441** | **1,234,965** | - The loan is unsecured and bears interest at an annual rate of **4.5%** (2024: **4%**)[39](index=39&type=chunk) - The unutilized loan facility amounted to approximately **HK$8,646,781 thousand**[39](index=39&type=chunk) [Financial Assets Sold Under Repurchase Agreements](index=19&type=section&id=3.18%20Financial%20Assets%20Sold%20Under%20Repurchase%20Agreements) As of June 30, 2025, the total carrying amount of financial assets (bonds) sold under repurchase agreements was approximately HK$1,081.49 million, a 47.1% increase from December 31, 2024. The Group retained substantially all risks and rewards of these bonds, thus they are treated as liabilities Financial Assets Sold Under Repurchase Agreements | Item | June 30, 2025 (HK$'000) | December 31, 2024 (HK$'000) | | :--- | :--- | :--- | | Bonds | 1,081,491 | 734,923 | | **Total** | **1,081,491** | **734,923** | - The total carrying amount of bonds sold was approximately **HK$1,346,303 thousand**, which are subject to repurchase on agreed dates and at agreed prices in accordance with concurrent agreements[41](index=41&type=chunk) - As the Group retained substantially all the risks and rewards of these bonds, they are not derecognized in the condensed consolidated financial statements and are treated as 'collateral' for liabilities"[41](index=41&type=chunk) [Share Capital](index=20&type=section&id=3.19%20Share%20Capital) As of June 30, 2025, total issued and fully paid share capital was 1,099,255,693 shares with a par value of HK$0.4, totaling HK$439.70 million. During the period, the company repurchased 2,287,000 ordinary shares for approximately HK$652 thousand, which were cancelled after the reporting period Share Capital Movement | Item | Number of Shares June 30, 2025 (thousand shares) | Number of Shares December 31, 2024 (thousand shares) | Amount June 30, 2025 (HK$'000) | Amount December 31, 2024 (HK$'000) | | :--- | :--- | :--- | :--- | :--- | | Authorised share capital (HK$0.4 par value per share) | 2,500,000 | 2,500,000 | 1,000,000 | 1,000,000 | | Issued and fully paid: at beginning of period/year | 1,099,256 | 1,119,362 | 439,702 | 447,745 | | Cancellation of repurchased shares | – | (20,106) | – | (8,043) | | At end of period/year | 1,099,256 | 1,099,256 | 439,702 | 439,702 | - For the six months ended June 30, 2025, the Company repurchased a total of **2,287,000 ordinary shares** for a total consideration of approximately **HK$652 thousand**[42](index=42&type=chunk) - The repurchased shares were cancelled on **August 27, 2025**[42](index=42&type=chunk) [Business Review](index=21&type=section&id=IV.%20Business%20Review) This section provides an overview of the Group's overall business performance and detailed reviews of its key operating segments [Overall Business Performance](index=21&type=section&id=4.1%20Overall%20Business%20Performance) The Group recorded revenue of approximately HK$245.4 million, a 56.7% year-on-year increase, and net profit of approximately HK$117.9 million, a 48.0% year-on-year increase, primarily due to significant growth in fee-based income from securities underwriting, sponsorship services, asset management, and wealth management - Revenue of approximately **HK$245.4 million**, a year-on-year increase of approximately **56.7%**[43](index=43&type=chunk) - Net profit of approximately **HK$117.9 million**, a year-on-year increase of approximately **48.0%**[43](index=43&type=chunk) - The increase in profit was primarily attributable to a significant year-on-year increase in fee-based income from **securities underwriting, sponsorship services, asset management, and wealth management-related businesses**[43](index=43&type=chunk) [Securities Business](index=21&type=section&id=4.2%20Securities%20Business) Despite market volatility, the Group's offshore debt capital market department performed exceptionally, completing 162 bond underwriting issuances with a total underwriting size exceeding US$1.71 billion, a 44% year-on-year increase, ranking among the top tier in the industry - Completed **162 bond underwriting issuances**, a year-on-year increase of **37%**[44](index=44&type=chunk) - Total underwriting size exceeded **US$1.71 billion**, a year-on-year increase of **44%**[44](index=44&type=chunk) - Underwriting scale ranked among the **top tier** in the industry, with clients primarily being financial institutions and investment-grade local state-owned enterprises[44](index=44&type=chunk) [Investment and Financing Business](index=22&type=section&id=4.3%20Investment%20and%20Financing%20Business) Amid macroeconomic uncertainties, the Group increased expected credit loss provisions for some high-yield bond investments, adjusted fair values of equity investments, and strengthened risk control in financing. Investments focused on Greater China, expanding to Asia, Europe, and America, with bond investments primarily in stable leading enterprises and equity investments in technology innovation and healthcare companies - Increased expected credit loss provisions for certain **high-yield bond investments** and adjusted the fair value of several **equity investments**[45](index=45&type=chunk) - Investments focused on **Greater China**, expanding to other developed regions such as Asia, Europe, and America, achieving diversified deployment[45](index=45&type=chunk) - In financing, customized solutions are provided, including **asset-backed loans, M&A loans, equity pledge financing, and bridge financing**, adopting a risk-control-oriented and stable development strategy[46](index=46&type=chunk) [Fixed Income Direct Investment](index=30&type=section&id=4.3.1%20Fixed%20Income%20Direct%20Investment) Fixed income direct investment segment revenue and net investment gains/losses were approximately HK$52.9 million, with segment loss decreasing to approximately HK$15.8 million, primarily due to overall gains from bond investment transactions and reduced interest expenses on repurchase agreements - Fixed income direct investment segment revenue and net investment gains/losses were approximately **HK$52.9 million**, an increase from **HK$43.5 million** in the prior period[57](index=57&type=chunk) - Segment loss decreased to approximately **HK$15.8 million**, compared to a loss of approximately **HK$22.6 million** in the prior period[57](index=57&type=chunk) - The decrease in segment loss was primarily due to increased net investment gains/losses and reduced interest expenses from repurchase agreements due to lower interest rates[57](index=57&type=chunk) [Other Investments and Financing](index=31&type=section&id=4.3.2%20Other%20Investments%20and%20Financing) Other investments and financing segment revenue and net investment gains/losses were approximately HK$25.0 million, a significant decrease from HK$103.8 million in the prior period, leading to a segment profit decline to HK$16.0 million, primarily due to a substantial reduction in fair value gains from investment projects - Other investments and financing segment revenue and net investment gains/losses were approximately **HK$25.0 million**, a significant decrease from **HK$103.8 million** in the prior period[58](index=58&type=chunk) - Segment profit decreased to approximately **HK$16.0 million**, compared to a profit of approximately **HK$93.0 million** in the prior period[58](index=58&type=chunk) - The investment portfolio primarily includes **listed equities, bonds, unlisted equities, and unlisted funds**, covering a wide range of sectors such as **industrial, healthcare, technology, consumer goods, real estate, and finance**[59](index=59&type=chunk) [Lending Business](index=32&type=section&id=4.3.3%20Lending%20Business) The Group engages in financing and money lending as an 'exempted person,' primarily focusing on short-to-medium term financing, with strict risk assessment and end-to-end management to ensure controllable overall credit and operational risks - The Group engages in financing and money lending as an **'exempted person'** as defined under the **Money Lenders Ordinance**[61](index=61&type=chunk) - The lending business primarily focuses on **short-to-medium term financing** to ensure flexibility and high liquidity in asset allocation[62](index=62&type=chunk) - Through practical risk control measures and stringent risk assessments, the overall credit and operational risks of the lending business are controllable[62](index=62&type=chunk) [Asset Management Business](index=23&type=section&id=4.4%20Asset%20Management%20Business) Amid macroeconomic challenges, the Group's asset management business maintained a prudent investment strategy, achieving stable net asset value growth for public funds and leading industry rankings. It successfully obtained approval to issue an SFC-authorized US dollar money market fund - CMBC Capital Greater China Select Bond Fund's net asset value increased by **3.09%**, and CMBC Capital Greater China Strategy Fund's net asset value increased by **7.40%**[47](index=47&type=chunk) - CMBC Capital Greater China Select Bond Fund ranked **first** in the 'Three-Year Greater China Bond Fund Performance List' for the second consecutive year[47](index=47&type=chunk) - Successfully obtained approval to issue an **SFC-authorized US dollar money market fund**[47](index=47&type=chunk) [Corporate Finance and Advisory Business](index=24&type=section&id=4.5%20Corporate%20Finance%20and%20Advisory%20Business) Benefiting from the recovery of Hong Kong's capital market and the trend of mainland enterprises listing in Hong Kong, the Group's corporate finance and advisory business saw significant growth in both revenue and profit. It successfully assisted multiple IPO projects in submitting listing applications and completed 14 IPO underwriting projects - Successfully assisted **Xinqi'an Technology Co., Ltd.** in completing its listing on the Main Board of the Stock Exchange and assisted **four IPO projects** in submitting listing applications[48](index=48&type=chunk) - Completed **14 IPO underwriting projects**, an increase of **3** from the prior period, covering sectors such as **artificial intelligence, biotechnology, consumer goods, and finance**[48](index=48&type=chunk) - Wealth management-related intermediary businesses formed a diversified product and service synergy matrix through **customized asset allocation solutions and efficient professional services**[48](index=48&type=chunk) [Outlook and Development Strategies](index=25&type=section&id=V.%20Outlook%20and%20Development%20Strategies) This section outlines the Group's future outlook, strategic priorities, and specific initiatives to navigate market challenges and capitalize on opportunities [Outlook](index=25&type=section&id=5.1%20Outlook) The global economy in H2 2025 is expected to remain complex and uncertain, with prevalent trade protectionism, but China's economy is projected to maintain growth, and Hong Kong's financial market is recovering. The Group will cautiously and optimistically address external challenges, seizing opportunities from Hong Kong's improving financial market and innovation - The global economy in H2 2025 is expected to remain **complex and uncertain**, with **trade protectionism** prevailing worldwide[49](index=49&type=chunk) - China's economy performed better than expected in H1, with both opportunities and challenges in H2, and monetary and fiscal policies still have room for support[49](index=49&type=chunk) - Hong Kong's economy maintains a **moderate recovery**, its financial market continues to **improve**, and stablecoin practices bring new development opportunities[49](index=49&type=chunk) [Development Strategies and Specific Initiatives](index=26&type=section&id=5.2%20Development%20Strategies%20and%20Specific%20Initiatives) The Group will adhere to the 'One Minsheng' strategy, leverage its international advantages and Hong Kong licensed investment banking services, promote cross-border business synergy, develop light-asset investment banking, and continuously improve corporate governance and risk management capabilities - Adhere to the **'One Minsheng' strategy**, fully leverage international advantages and Hong Kong licensed investment banking services, and vigorously promote **cross-border business synergy**[50](index=50&type=chunk) - Vigorously develop **strategic investment banking businesses**, focusing on specialized areas such as **TMT, new energy, high-tech, consumer and social services, biomedicine, and M&A**[50](index=50&type=chunk) - Solidly advance **wealth management foundational businesses**, promote securities business upgrades, accelerate the creation of a **one-stop trading platform**, and launch **virtual asset ETF trading services**[51](index=51&type=chunk) - Continuously enhance **risk and compliance management capabilities**, improve the comprehensive risk management system, and strengthen compliance training[51](index=51&type=chunk) - Strengthen the **investment banking talent development system**, attract top talent, and build a first-class international investment banking team[51](index=51&type=chunk) - Optimize the **securities trading APP functionality** and enhance user experience[52](index=52&type=chunk) - Fully leverage the positive spillover effects of the overseas research team, build a **high-end CMBC Research brand**, and strengthen cross-border decision support and research value transformation[52](index=52&type=chunk) [Financial Performance Analysis](index=29&type=section&id=VI.%20Financial%20Performance%20Analysis) This section provides a detailed analysis of the Group's financial performance, including overall profitability, revenue drivers, and segment-specific results [Overall Financial Performance](index=29&type=section&id=6.1%20Overall%20Financial%20Performance) The Group's profit attributable to owners for H1 2025 was HK$117.9 million, a 48.0% year-on-year increase, with basic and diluted earnings per share of 10.73 HK cents, indicating a significant improvement in profitability - Profit attributable to owners of the Company was approximately **HK$117.9 million**, a year-on-year increase of **48.0%**[53](index=53&type=chunk) - Basic and diluted earnings per share were approximately **10.73 HK cents**[53](index=53&type=chunk) [Revenue Analysis](index=29&type=section&id=6.2%20Revenue%20Analysis) The Group's revenue for H1 2025 increased by 56.7% from HK$156.7 million to HK$245.4 million, primarily driven by increased bond and equity underwriting, sponsorship projects, asset management fee rate adjustments, and wealth management-related fee income - Revenue increased by approximately **56.7%** from approximately **HK$156.7 million** in the prior period to approximately **HK$245.4 million**[54](index=54&type=chunk) - The increase in revenue was primarily due to increased **bond and equity underwriting projects** and **sponsorship projects**, significant growth in **asset management fee income**, and increased **fee income from wealth management-related businesses**[54](index=54&type=chunk) [Securities Segment Performance](index=30&type=section&id=6.3%20Securities%20Segment%20Performance) The securities segment's revenue rose to HK$59.0 million, achieving a profit of HK$28.1 million, turning around from a loss year-on-year, primarily due to increased bond underwriting business and growth in interest income from securities margin financing - Securities segment revenue increased to approximately **HK$59.0 million**, with segment results showing a profit of **HK$28.1 million**[56](index=56&type=chunk) - Compared to revenue of approximately **HK$14.7 million** and a loss of approximately **HK$0.6 million** in the prior period, the segment achieved a year-on-year turnaround to profit[56](index=56&type=chunk) - The increase in segment revenue was primarily due to increased **bond underwriting business** and increased **interest income from securities margin financing** driven by higher receivables from margin clients[56](index=56&type=chunk) [Investment and Financing Segment Performance](index=30&type=section&id=6.4%20Investment%20and%20Financing%20Segment%20Performance) The investment and financing segment showed mixed performance, with increased revenue and reduced losses in fixed income direct investment, while other investments and financing saw significant declines in both revenue and profit, mainly impacted by fair value gains from investment projects [Fixed Income Direct Investment Segment](index=30&type=section&id=6.4.1%20Fixed%20Income%20Direct%20Investment%20Segment) Fixed income direct investment segment revenue and net investment gains/losses were approximately HK$52.9 million, with segment loss decreasing to approximately HK$15.8 million, primarily due to overall gains from bond investment transactions and reduced interest expenses on repurchase agreements - Fixed income direct investment segment revenue and net investment gains/losses were approximately **HK$52.9 million**, compared to approximately **HK$43.5 million** in the prior period[57](index=57&type=chunk) - Segment loss decreased to approximately **HK$15.8 million**, compared to a loss of approximately **HK$22.6 million** in the prior period[57](index=57&type=chunk) - The decrease in segment loss was primarily due to increased net investment gains/losses and reduced interest expenses from repurchase agreements due to lower interest rates[57](index=57&type=chunk) [Other Investments and Financing Segment](index=31&type=section&id=6.4.2%20Other%20Investments%20and%20Financing%20Segment) Other investments and financing segment revenue and net investment gains/losses were approximately HK$25.0 million, a significant decrease from HK$103.8 million in the prior period, leading to a segment profit decline to HK$16.0 million, primarily due to a substantial reduction in fair value gains from investment projects - Other investments and financing segment revenue and net investment gains/losses were approximately **HK$25.0 million**, compared to approximately **HK$103.8 million** in the prior period[58](index=58&type=chunk) - Segment profit decreased to approximately **HK$16.0 million**, compared to a profit of approximately **HK$93.0 million** in the prior period[58](index=58&type=chunk) - The significant decrease in segment revenue and net investment gains/losses was primarily due to a substantial reduction in fair value gains from investment projects compared to the prior period[58](index=58&type=chunk) [Asset Management Segment Performance](index=33&type=section&id=6.5%20Asset%20Management%20Segment%20Performance) The asset management segment's revenue was approximately HK$93.3 million and profit was approximately HK$82.9 million, both significantly increased year-on-year, primarily due to fee rate adjustments for some portfolios in the second half of last year - Asset management segment recorded revenue of approximately **HK$93.3 million**, compared to approximately **HK$51.5 million** in the prior period[63](index=63&type=chunk) - Segment profit recorded was approximately **HK$82.9 million**, compared to approximately **HK$39.6 million** in the prior period[63](index=63&type=chunk) - The increase in segment revenue and profit was due to a significant year-on-year increase in revenue resulting from **fee rate adjustments for some portfolios** in the second half of last year[63](index=63&type=chunk) [Corporate Finance and Advisory Segment Performance](index=33&type=section&id=6.6%20Corporate%20Finance%20and%20Advisory%20Segment%20Performance) The corporate finance and advisory segment's revenue was approximately HK$42.9 million and profit was approximately HK$25.8 million, both significantly increased year-on-year, benefiting from a favorable Hong Kong capital market, IPO market rebound, and increased sponsorship and equity underwriting income - Corporate finance and advisory segment recorded revenue of approximately **HK$42.9 million**, compared to approximately **HK$25.8 million** in the prior period[64](index=64&type=chunk) - Segment profit recorded was approximately **HK$25.8 million**, compared to a segment profit of approximately **HK$13.6 million** in the prior period[64](index=64&type=chunk) - The increase in segment revenue and results was primarily due to increased **sponsorship income and equity underwriting income** during the reporting period[64](index=64&type=chunk) [Administrative Expenses and Finance Costs](index=34&type=section&id=6.7%20Administrative%20Expenses%20and%20Finance%20Costs) The Group's administrative expenses and finance costs totaled approximately HK$134.1 million in H1 2025, a slight decrease from the prior period. Staff costs and other operating expenses increased, while finance costs decreased due to lower interest rates on repurchase agreements Administrative Expenses and Finance Costs Breakdown | Item | June 30, 2025 (HK$'000) | June 30, 2024 (HK$'000) | | :--- | :--- | :--- | | Staff costs | 45,758 | 40,588 | | Depreciation | 10,643 | 11,085 | | Other operating expenses | 29,288 | 26,811 | | Finance costs | 48,368 | 58,174 | | **Total** | **134,057** | **136,658** | - The increase in staff costs was primarily due to an **increase in headcount**[66](index=66&type=chunk) - The decrease in finance costs was primarily due to **lower interest rates on repurchase agreements**[68](index=68&type=chunk) [Liquidity, Financial Resources and Capital Structure](index=35&type=section&id=VII.%20Liquidity,%20Financial%20Resources%20and%20Capital%20Structure) This section details the Group's capital structure, liquidity position, financial resources, and related financial management aspects [Capital Structure](index=35&type=section&id=7.1%20Capital%20Structure) As of June 30, 2025, the Group's total issued shares were 1,099,255,693, with total equity attributable to shareholders of approximately HK$1,556.2 million. During the reporting period, the company repurchased 2,287,000 shares, which were cancelled after the period end - Total issued shares were **1,099,255,693** with a par value of **HK$0.4** per share[69](index=69&type=chunk) - Total equity attributable to shareholders was approximately **HK$1,556.2 million**, an increase from **HK$1,388.8 million** as of December 31, 2024[69](index=69&type=chunk) - During the reporting period, the Company repurchased a total of **2,287,000 ordinary shares** for a total consideration of approximately **HK$0.65 million**[86](index=86&type=chunk) [Liquidity and Financial Resources](index=35&type=section&id=7.2%20Liquidity%20and%20Financial%20Resources) As of June 30, 2025, the Group's current assets were approximately HK$4,885.0 million, and quick assets were approximately HK$2,468.2 million. The current ratio was approximately 1.4, and the gearing ratio was approximately 61.0%. Management believes the Group has ample financial resources to meet its operational needs - Current assets were approximately **HK$4,885.0 million**, an increase from **HK$3,774.1 million** as of December 31, 2024[71](index=71&type=chunk) - Quick assets (cash, listed equity securities investments, and debt investments) totaled approximately **HK$2,468.2 million**[71](index=71&type=chunk) - The current ratio was approximately **1.4** (December 31, 2024: **1.6**)[71](index=71&type=chunk) - The gearing ratio was approximately **61.0%** (December 31, 2024: **58.4%**)[72](index=72&type=chunk) - Management believes the Group has **ample financial resources** to meet its ongoing operational funding requirements[72](index=72&type=chunk) [Pledge of Assets](index=36&type=section&id=7.3%20Pledge%20of%20Assets) Unless otherwise disclosed, as of June 30, 2025, the Group had no other pledged or charged assets - As of **June 30, 2025**, the Group had no other pledged or charged assets[73](index=73&type=chunk) [Contingent Liabilities](index=36&type=section&id=7.4%20Contingent%20Liabilities) As of June 30, 2025, the Group had no material contingent liabilities - As of **June 30, 2025**, the Group had no material contingent liabilities[74](index=74&type=chunk) [Other Important Information](index=37&type=section&id=VIII.%20Other%20Important%20Information) This section covers additional disclosures including future investment plans, capital commitments, significant investments, foreign currency risk, human resources, risk management, corporate governance, and post-reporting period events [Future Plans for Material Investments or Capital Assets](index=37&type=section&id=8.1%20Future%20Plans%20for%20Material%20Investments%20or%20Capital%20Assets) As of June 30, 2025, the Group had no specific plans for any material investments or capital assets - As of **June 30, 2025**, the Group had no specific plans for any material investments or capital assets[75](index=75&type=chunk) [Capital Commitments](index=37&type=section&id=8.2%20Capital%20Commitments) As of June 30, 2025, the Group had no material capital commitments - As of **June 30, 2025**, the Group had no material capital commitments[76](index=76&type=chunk) [Holding of Material Investments](index=37&type=section&id=8.3%20Holding%20of%20Material%20Investments) During the reporting period, the Group did not hold any single material investment exceeding 5% of its total assets - During the reporting period, the Group did not hold any single material investment exceeding **5% of its total assets**[77](index=77&type=chunk) [Material Acquisitions and Disposals of Subsidiaries and Associates](index=37&type=section&id=8.4%20Material%20Acquisitions%20and%20Disposals%20of%20Subsidiaries%20and%20Associates) During the reporting period, the Group did not have any material acquisitions or disposals of subsidiaries and associates - During the reporting period, the Group did not have any **material acquisitions or disposals of subsidiaries and associates**[78](index=78&type=chunk) [Foreign Currency Risk Management](index=37&type=section&id=8.5%20Foreign%20Currency%20Risk%20Management) The Group's revenue is primarily denominated in USD and HKD, while expenses are mainly in HKD. Given the HKD's peg to the USD, the Directors believe foreign exchange risk is manageable, and the Group does not use derivative financial instruments to hedge foreign exchange risk - The Group's revenue is primarily denominated in **US dollars and Hong Kong dollars**, and expenses are mainly denominated in **Hong Kong dollars**[79](index=79&type=chunk) - The Group does not use **derivative financial instruments** to hedge its foreign exchange risk[79](index=79&type=chunk) - As the Hong Kong dollar is pegged to the US dollar, the Directors believe the Group's **foreign exchange risk is manageable**[79](index=79&type=chunk) [Human Resources and Remuneration Policies](index=38&type=section&id=8.6%20Human%20Resources%20and%20Remuneration%20Policies) As of June 30, 2025, the Group had approximately 100 employees, with total staff costs of approximately HK$45.8 million. Remuneration is based on market terms and individual capabilities, including MPF schemes, subsidized training, share award schemes, and discretionary bonuses - As of **June 30, 2025**, the Group had approximately **100 employees** (June 30, 2024: **88 employees**)[80](index=80&type=chunk) - Total staff costs were approximately **HK$45.8 million** (prior period: **HK$40.6 million**)[80](index=80&type=chunk) - Employee benefit schemes include a **Mandatory Provident Fund scheme, subsidized training programs, a share award scheme, and discretionary bonuses**[80](index=80&type=chunk) [Risk Management Capabilities](index=38&type=section&id=8.7%20Risk%20Management%20Capabilities) The Group continuously strengthens its overall risk management capabilities, with a Risk Management and Internal Control Committee, implementing comprehensive risk management, and establishing robust internal control procedures to manage credit, market, legal and compliance, operational, and liquidity risks - The Board has established a **Risk Management and Internal Control Committee** to oversee the Group's overall risk management framework[81](index=81&type=chunk) - The Group implements **comprehensive risk management**, primarily managing **credit risk, market risk, legal and compliance risk, operational risk, and liquidity risk**[81](index=81&type=chunk) - Robust **internal control procedures** have been established to monitor, assess, and manage risks associated with various business activities[81](index=81&type=chunk) [Interim Dividend](index=38&type=section&id=8.8%20Interim%20Dividend) The Board does not recommend the payment of an interim dividend for the reporting period - The Board does not recommend the payment of an **interim dividend** for the reporting period (prior period: nil)[82](index=82&type=chunk) [Corporate Governance](index=38&type=section&id=8.9%20Corporate%20Governance) Throughout the reporting period, the Company complied with all applicable provisions of the Corporate Governance Code set out in Appendix C1 of the Listing Rules - The Company has complied with all applicable provisions of the **Corporate Governance Code** set out in **Appendix C1 of the Listing Rules**[83](index=83&type=chunk) [Standard Code for Securities Transactions by Directors of Listed Issuers](index=39&type=section&id=8.10%20Standard%20Code%20for%20Securities%20Transactions%20by%20Directors%20of%20Listed%20Issuers) The Company has adopted the Standard Code set out in Appendix C3 of the Listing Rules and confirmed that all Directors complied with it during the reporting period - The Company has adopted the **Standard Code** set out in **Appendix C3 of the Listing Rules**[84](index=84&type=chunk) - All Directors have complied with the required standards set out in the **Standard Code** during the reporting period[84](index=84&type=chunk) [Review of Interim Results](index=39&type=section&id=8.11%20Review%20of%20Interim%20Results) The Company's Audit Committee has reviewed the unaudited condensed consolidated financial statements and deemed them compliant with applicable accounting standards, Listing Rules, and other legal requirements, with adequate disclosures - The Company's **Audit Committee** has reviewed the unaudited condensed consolidated financial statements[85](index=85&type=chunk) - The Audit Committee believes the financial statements comply with applicable **accounting standards, Listing Rules requirements, and other applicable legal requirements**, and that **adequate disclosures** have been made[85](index=85&type=chunk) [Purchase, Sale or Redemption of the Company's Listed Securities](index=39&type=section&id=8.12%20Purchase,%20Sale%20or%20Redemption%20of%20the%20Company's%20Listed%20Securities) The Company repurchased 2,287,000 shares during the reporting period for approximately HK$0.65 million, aiming to enhance the net asset value per share. All repurchased shares were cancelled as of the announcement date - The Company repurchased a total of **2,287,000 shares** on the Stock Exchange for a total consideration of approximately **HK$0.65 million**[86](index=86&type=chunk) - The repurchase of shares can enhance the **net asset value per share**[86](index=86&type=chunk) - As of the date of this announcement, all repurchased shares have been **cancelled**[86](index=86&type=chunk) Details of Share Repurchases | Month of Repurchase | Total Number of Shares Repurchased | Highest Price Paid Per Share (HKD) | Lowest Price Paid Per Share (HKD) | Total Consideration Paid (HK$'000) | | :--- | :--- | :--- | :--- | :--- | | April | 1,826,000 | 0.330 | 0.235 | 518 | | May | 461,000 | 0.305 | 0.280 | 134 | | **Total** | **2,287,000** | | | **652** | [Events After the Reporting Period](index=40&type=section&id=8.13%20Events%20After%20the%20Reporting%20Period) Except as disclosed in this interim results announcement, no material events occurred after the reporting period and up to the date of this announcement - Except as disclosed in this interim results announcement, no **material events** occurred after the reporting period and up to the date of this announcement[89](index=89&type=chunk) [Publication of Interim Report](index=40&type=section&id=8.14%20Publication%20of%20Interim%20Report) The Company's interim report for the reporting period will be published on the Stock Exchange and the Company's website in due course - The Company's interim report for the reporting period will be published on the **Stock Exchange (www.hkexnews.hk)** and the **Company's website (www.cmbccap.com)** in due course[90](index=90&type=chunk) [Board of Directors](index=40&type=section&id=8.15%20Board%20of%20Directors) As of the date of this announcement, the Board of Directors includes Executive Directors Mr. Li Baozhen, Mr. Li Ming, and Mr. Wu Haigan; Non-executive Directors Ms. Wu Yuan and Mr. Xu Feng; and Independent Non-executive Directors Mr. Li Zhuoran, Mr. Wu Bin, and Mr. Wang Lihua - Executive Directors: **Mr. Li Baozhen, Mr. Li Ming, and Mr. Wu Haigan**[92](index=92&type=chunk) - Non-executive Directors: **Ms. Wu Yuan and Mr. Xu Feng**[92](index=92&type=chunk) - Independent Non-executive Directors: **Mr. Li Zhuoran, Mr. Wu Bin, and Mr. Wang Lihua**[92](index=92&type=chunk)

Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income [Financial Performance Overview](index=1&type=section&id=Financial%20Performance%20Overview) The Group's H1 2025 revenue increased, with a narrowed loss and improved basic and diluted loss per share Condensed Consolidated Interim Statement of Profit or Loss and Other Comprehensive Income (For the six months ended June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Revenue | 38,390 | 36,705 | +4.6% | | Cost of Sales | (38,136) | (36,584) | +4.3% | | Gross Profit | 254 | 121 | +109.9% | | Other Income | 3 | 251 | -98.8% | | Administrative Expenses | (12,915) | (12,458) | +3.7% | | Selling Expenses | – | (155) | -100.0% | | Finance Costs | (90) | (148) | -39.2% | | Loss Before Tax | (12,748) | (12,389) | +2.9% | | Income Tax Credit | 1,644 | – | N/A | | Loss for the Period | (11,104) | (12,389) | -10.4% | | Loss Attributable to Owners of the Company | (11,104) | (12,389) | -10.4% | | Total Comprehensive Loss for the Period | (8,544) | (14,942) | -42.8% | | Basic and Diluted Loss Per Share (HK cents) | (1.29) | (1.47) | -12.2% | - The **narrowed loss for the period** was primarily due to the **reversal of over-provision for PRC withholding tax in prior years**[41](index=41&type=chunk) Condensed Consolidated Interim Statement of Financial Position [Financial Position Overview](index=3&type=section&id=Financial%20Position%20Overview) As at June 30, 2025, the Group's total assets less current liabilities, net assets, and total equity increased Condensed Consolidated Interim Statement of Financial Position (As at June 30) | Indicator | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | **Non-current Assets** | | | | | Property, Plant and Equipment | 16,092 | 16,099 | -0.04% | | Intangible Assets | 155,676 | 155,676 | 0.0% | | Right-of-use Assets | 549 | 1,484 | -63.0% | | Statutory Deposits and Other Assets | 2,622 | 2,622 | 0.0% | | **Current Assets** | | | | | Trade Receivables | 2,961 | 4,332 | -31.6% | | Prepayments, Deposits and Other Receivables | 105,148 | 91,237 | +15.2% | | Bank Balances and Cash | 1,917 | 13,511 | -85.8% | | **Current Liabilities** | | | | | Trade and Other Payables | 29,561 | 21,618 | +36.7% | | Loan from Ultimate Holding Company | 8,725 | 10,900 | -19.9% | | Bank Loans and Other Borrowings | 3,287 | 3,193 | +2.9% | | Lease Liabilities | 590 | 1,701 | -65.3% | | Tax Payable | 6,340 | 12,801 | -50.5% | | **Net Assets** | 230,362 | 228,648 | +0.7% | | **Total Equity** | 230,362 | 228,648 | +0.7% | - **Bank balances and cash significantly decreased by 85.8%**, from HK$13,511 thousand to **HK$1,917 thousand**[5](index=5&type=chunk) - **Prepayments, deposits and other receivables increased by 15.2%**, primarily due to an increase in trade deposits paid[5](index=5&type=chunk)[10](index=10&type=chunk) Notes to the Unaudited Condensed Consolidated Interim Financial Statements [1. General Information](index=5&type=section&id=1.%20General%20Information) The company's core business includes investment holding, oil and gas operations, and trading, with shares listed on HKEX - The Group's principal activities include investment holding, oil and gas exploration, extraction and sales, and trading of oil, oil-related and other products[7](index=7&type=chunk) [2. Basis of Preparation](index=5&type=section&id=2.%20Basis%20of%20Preparation) Interim financial statements follow HKAS 34, reviewed by Audit Committee, with Board affirming going concern - The Group incurred a **net loss attributable to owners of the Company of HK$11,104,000** for the six months ended June 30, 2025, with **bank balances and cash of only HK$1,917,000** and total trade and other payables of approximately HK$37,205,000 due within the next 12 months, indicating significant going concern uncertainty[11](index=11&type=chunk) - The Board believes the Group will have sufficient working capital, primarily based on the ultimate holding company's commitment to financial support, internal cash flow forecasts, consideration of other financing arrangements, and enhanced cost control measures[11](index=11&type=chunk)[13](index=13&type=chunk) [3. Changes in Accounting Policies](index=7&type=section&id=3.%20Changes%20in%20Accounting%20Policies) Current accounting policies are consistent, with no significant impact from new HKFRSs, and future impacts are assessed - New/revised Hong Kong Financial Reporting Standards adopted during the period had **no material impact** on the Group's results and financial position[14](index=14&type=chunk) [4. Revenue and Segment Information](index=7&type=section&id=4.%20Revenue%20and%20Segment%20Information) The Group operates in oil/gas sales and trading segments, with trading contributing most revenue from China Revenue by Major Products (For the six months ended June 30) | Major Product | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Oil and Gas Sales | 5 | – | N/A | | Trading of Oil, Oil-related and Other Products | 38,385 | 36,705 | +4.6% | | **Total Revenue** | **38,390** | **36,705** | **+4.6%** | Revenue by Geographical Location of Customers (For the six months ended June 30) | Geographical Location | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | United States of America | 5 | – | N/A | | People's Republic of China | 38,385 | 36,705 | +4.6% | | **Total Revenue** | **38,390** | **36,705** | **+4.6%** | - The **oil and gas sales segment recorded revenue of HK$5 thousand** in the current period, compared to zero in the prior year period[19](index=19&type=chunk) - The oil and gas sales segment incurred a **loss of HK$3,106 thousand**, while the trading of oil, oil-related and other products segment incurred a **loss of HK$717 thousand**[20](index=20&type=chunk) [5. Loss Before Tax](index=11&type=section&id=5.%20Loss%20Before%20Tax) Loss before tax was HK$12,748 thousand, impacted by expenses, with no penalties incurred this period Key Deductions from Loss Before Tax (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | Change (%) | | :--- | :--- | :--- | :--- | | Depreciation – Property, Plant and Equipment | 47 | 45 | +4.4% | | Depreciation – Right-of-use Assets | 935 | 935 | 0.0% | | Finance Costs – Interest on Lease Liabilities | 33 | 87 | -62.1% | | Finance Costs – Interest Expense | 57 | 61 | -6.6% | | Employee Benefit Expenses – Salaries and Allowances | 3,635 | 4,805 | -24.3% | | Employee Benefit Expenses – Retirement Scheme Contributions | 178 | 181 | -1.7% | | Penalties | – | 4,212 | -100.0% | - **No penalties were incurred in the current period**, compared to HK$4,212 thousand in the prior year period[23](index=23&type=chunk) [6. Income Tax Credit](index=12&type=section&id=6.%20Income%20Tax%20Credit) An income tax credit of HK$1,644 thousand resulted from PRC withholding tax reversal, with no profit tax provision Income Tax Credit (For the six months ended June 30) | Item | 2025 (HK$ thousand) | 2024 (HK$ thousand) | | :--- | :--- | :--- | | Current Income Tax Credit – PRC withholding tax | 274 | – | | Over-provision in prior years – PRC withholding tax | (1,918) | – | | **Total Tax Credit for the Period** | **(1,644)**

Financial Performance - The contracted sales amount for the six months ended June 30, 2025, was approximately RMB 55.8 million, representing a decrease of about 50.6% year-on-year[2]. - The group's revenue for the reporting period was approximately RMB 83.3 million, with property development revenue accounting for approximately RMB 81.9 million[2]. - The gross profit for the period was approximately RMB 33.4 million, with property development contributing approximately RMB 32.0 million[2]. - The net loss for the reporting period was approximately RMB 85.2 million, with the loss attributable to the company's owners amounting to approximately RMB 90.8 million[2]. - For the six months ended June 30, 2025, the company's revenue from customer contracts was RMB 81,898,000, a significant decrease of 92.3% compared to RMB 1,068,552,000 for the same period in 2024[13]. - Total income for the six months ended June 30, 2025, was RMB 83,335,000, down 92.2% from RMB 1,069,521,000 in 2024[13]. - The cost of sold properties for the six months ended June 30, 2025, was RMB 49,923,000, a decrease of 93.9% from RMB 812,586,000 in 2024[16]. - The company's pre-tax loss for the six months ended June 30, 2025, was RMB (90,788,000), compared to a profit of RMB 26,268,000 in the same period of 2024[21]. - The total tax expense for the six months ended June 30, 2025, was RMB 10,698,000, a decrease of 84.6% from RMB 69,255,000 in 2024[18]. - The basic loss per share for the period was approximately RMB 0.15[2]. - The group recorded a net loss attributable to shareholders of approximately RMB 90.8 million, an increase of about 445.6% compared to the same period last year[29]. Assets and Liabilities - The total assets less current liabilities amounted to RMB 3,340,147 thousand[7]. - The total equity of the company was RMB 1,140,809 thousand, with equity attributable to the owners of the parent company at RMB 977,300 thousand[7]. - Trade receivables as of June 30, 2025, included amounts overdue by more than 6 months totaling RMB 2,061,000[23]. - Trade payables as of June 30, 2025, totaled RMB 823,263,000, a slight decrease from RMB 863,299,000 as of December 31, 2024[24]. - The group's total debt as of June 30, 2025, was approximately RMB 2,712.1 million, with a debt-to-equity ratio of approximately 237.7%, up from 222.4% as of December 31, 2024, primarily due to losses reducing total equity[74]. Land and Property Development - The total land reserve area at the end of the reporting period reached 2,125,308 square meters, with an average cost of approximately RMB 881.7 per square meter[2]. - The average contracted selling price during the reporting period was approximately RMB 7,101.0 per square meter[2]. - The total signed building area was approximately 7,858 square meters, a decrease of about 54.5% year-on-year[36]. - The company retains ownership of strategic commercial properties to generate stable income, with investment properties totaling approximately 21,613 square meters as of June 30, 2025[38]. - The completed projects include various types of properties, with a total completed area of 3,364,127 square meters, including retail shops, residential, and commercial properties[39]. - The company has a total of 300,804 parking spaces completed, with an additional 187,821 spaces under development[39]. - The company has a significant number of unsold properties, including 233,947 square meters of completed but unsold residential/commercial space[45]. - The company is developing new projects, including a commercial project in Jinzhong with a planned building area of 112,638 square meters, expected to be completed by 2026[48]. - The company has ongoing projects with an estimated completion area of 146,538 square meters and a total building area of 356,400 square meters planned for future development[48]. Corporate Governance - The company has maintained a high standard of corporate governance to ensure management integrity and protect shareholder interests[81]. - The board consists of four executive directors and three independent non-executive directors, responsible for overseeing business operations and strategic decisions[81]. - The audit committee, composed of three independent non-executive directors, has reviewed the company's accounting principles and policies, ensuring compliance with applicable laws and regulations[87]. - The company has established an audit committee in accordance with the listing rules and corporate governance code[87]. - The company has confirmed sufficient public float as per the requirements of the stock exchange[86]. - The company has adopted the corporate governance code as per the listing rules and has complied with all applicable provisions during the reporting period[81]. Market Outlook and Strategy - The real estate market in China is expected to continue its adjustment phase, with a focus on improving market confidence and addressing supply-demand dynamics in the second half of 2025[31]. - The company plans to focus on high-end improvement housing projects and enhance product quality and service standards in response to market changes[33]. - The company aims to increase investment in product research and development, green building, and smart home technologies to meet consumer demands for high-quality living experiences[33]. - The company anticipates further industry consolidation, with larger firms expanding market share while smaller firms face liquidity challenges[32]. - The company is expanding its market presence with new developments in both Shanxi and Sichuan provinces[48].